PEACE 
AND  PROSPERITY 


IC-NRLF 


GIFT  or 


t^^^ 

^V^^^^- 


PEACE 
AND   PROSPERITY 


VIA 

Justice  and  Practical  Sense 


"The  square  deal." — Roosevelt. 
"Honesty  is  the  best  policy." — Franklin. 
"Godliness  is  profitable." — Bible. 
"Who  would  be  free,  himself  must  strike  the  blow." 
"Speech  without  action  is  a  moral  dearth,  and  to 
advance  the  world  is  little  worth."     See  "P.  S." 


Copyright, 

JOHN   B.   ALDEN,   Publisher, 

NESHANIC,  N.  J. 


PREFATORY 

Most  of  the  important  problems  of  statesmanship  are 
simple  ones,  readily  understood  by  any  man  of  ordinary 
intelligence;  and  right  action,  and  wise  action,  "boiled 
down,"  are  matters  of  simple  right  and  justice,  and  of 
common  sense  directness  to  the  end  aimed  at. 

Of  the  world's  economic  problems  two  of  the  most 
vital,  far  reaching — far  and  big  almost  beyond  imagina- 
tion— are  finance  and  transportation. 

This  little  book  deals  in  outline,  only,  with  transporta- 
tion, but  the  just  and  "sense"  foundation  is  clear;  the 
superstructure  can  be  comparatively  simple;  the  "Men 
Who  Pay  the  Freight,"  and  the  "Labor"  that  will  do  the 
work,  will  "automatically,"  given  opportunity,  work  out 
the  details. 

The  financial  problem  is  dealt  with  more  at  length. 
Most,  if  not  all,  that  is  essential  is  easily  within  the  com- 
prehension of  almost  anyone  who  will  give  the  matter 
study. 

The  right  solution  of  these  problems  means  freedom, 
prosperity,  culture,  the  essentials  of  "wealth"  for  the 
masses. 

The  wrong  solution  means  commercial  antagonism, 
never-ending  economic  war,  ''chains  and  slavery"  (sub- 
tile, but  binding,  killing,  as  the  web  of  the  spider  to  the 
fly)  for  the  millions — means  luxury,  enervating,  demora- 
lizing, corrupting,  boundless  wealth  for  the  few. 

J.  B.  A. 

NESHANIC,  N.  J.,  1919. 


CONTENTS 

PAGE 

Transportation:    National    Ownership;   Private   Op- 
eration  5 

Will  the  U.  S.  Automatic  R.R.  Regulator  Work?.      .   12 

Text  of  Bill  Before  Congress 13 

Transportation   Incidentals 19 

Water  and  Air  Transportation  .      .      .      ....      .21 

Financial  Justice  and  Industrial  Savings     ....  23 

The  Industrial  Savings  Act 26 

Senator  Sheppard's  Argument  .      .      ,      .      ...   52 

Is  "Silence"  the  Only  Answer? 58 

A  Big  Issue  for  Nineteen  Hundred  and  Twenty?     .   59 

The  Nutshell  of  It  All 62 

Sample  $10  Bill  Postal  Savings  Bank  "Money"  .      .  63 
Land-Rent,  Money-Rent  and  Rural  Credits  ...  65 

A   Tremendous   Mistake 67 

A  Square  Deal  in  Milk 68 

Milk  "Tanks"  . 72-90 

Financing  a  Square  Deal  in  Milk     .      .     ,,.     ...  77 

Working  Capital  Fund 81 

Other  Ways  and  Means 85 

Local  Transportation   .     .     .     UJ        86 

A  River  of  Milk 88 

Why  Stop  at  Milk? tfj     .     .     m     .  92 

"Beat  the  Meat  Trust" M     .     .  92 

The  Economic  Millenium 92 

Self -Help  the  Best  Kind.     .     .     .     .,    .     .     .     .93 
Post  Scriptum 95 


THREE  CENTS  WORTH  OF  PATRIOTISM? 

Have  you  that  much?    "Sure  thing?" 

A  3-cent  postage  stamp  will  do  a  lot !  Your  Congress- 
man wants — and  needs — to  hear  from  you.  The  Grafters 
—the  "Interests"— "hearts  right  there"  (song  of  "Tip- 
perary")  are  with  him  every  day,  and  one  of  them  is 
liable  to  loom  larger  in  his  eyes  than  a  hundred  (or  a 
thousand?)  farmers,  or  other  "common  voters" — unless 
he  hears  from  them  once  in  a  while.  Just  a  postal  card 
like  this: 

"Dear  Congressman  Blank.  I  vote  to  unshackle 
the  Postal  Savings  Bank.  Make  it  free  as  the  Post 
Office — and  universal — open  to  the  intelligent  and 
thrifty  American,  as  well  as  to  the  ignorant,  timid 
"Dago."  And  loan  the  money  to  any  honest  man 
who  will  give  good  security  and  pay  the  most  inter- 
est— not  to  bankers  only,  at  a  ridiculous  2*4  per 
cent." 

That  postal  card  will  "touch  the  spot."  He  wants  it — 
needs  it.  Send  it  quick — better,  of  course,  write  in  your 
own  way  and  language. 

A  "PEACE"  ARMY  OF  EIGHTY  MILLIONS 

Even  the  "shackled"  Postal  Savings  Bank  has,  already, 
over  600,000  depositors,  with  over  $140,000,000  to  their 
credit.  (See  latest  official  report.) 

"Unshackle"  the  bank,  and  make  every  P.  O.,  every 
letter  carrier,  its  servants,  as  they  now  serve  for  money 
orders,  registered  letters  and  Parcel  Post,  and  there  would 
in  a  few  months  be  an  "army"  of  eighty  million  deposi- 
tors. 

Existing  Savings  Banks  (see  World  Almanac)  have 
now  over  llJ/3  million  depositors,  nearly  $500  each,  aver- 
age— that  ratio  would  give  the  "unshackled"  Postal  Bank 
about  forty  billion  dollars. 


TRANSPORTATION 

National  Ownership;  Private  Operation 

"Uncle  Sam's  Automatic  Railroad  Regulator" 

Will  not  the  plans  following  give  us  economic  peace 
and  prosperity  instead  of  incessant  economic  war,  or 
commercial  antagonism,  such  as  we  have  had  these  many 
years — always  since  railroads  were  invented? 

Take  the  railroads  out  of  politics  altogether? 

Give  practically  unlimited  financial  strength,  and  least 
possible  cost  of  capital? 

Give  efficiency  of  operation  in  the  utmost  degree? 

Give  immaculate  justice  to  investors? 

Give  equal  justice,  together  with  the  lowest  possible 
cost  of  transportation,  to  the  Man  Who  Pays  the 
Freight  ? 

Give  the  greatest  possible  measure  of  contentment,  and 
of  zeal  in  service,  to  railroad  employees? 

Give  justice  and  economic  service  in  the  highest  con- 
ceivable measure  to  all  producers  and  all  consumers 
whose  cost  of  living,  and  compensation  for  labor,  are  in- 
timately and  always  affected  by  transportation  cost  and 
service  ? 

We  start  with  things  as  they  are : 

Approximately  twenty  billion  dollars  of  capital  now 
invested  in  railroads,  costs  under  present  conditions — has 
cost,  always,  on  the  average — over  6  per  cent,  per  annum 
(possibly  over  8  per  cent.?)  over  twelve  hundred  million 

5 


6''      ~:''$EACE  A^D  PROSPERITY  VIA 


dollars  a  year.  This  cost,  inevitably,  is  passed  along, 
through  the  man  who  pays  the  freight,  to  producer  and 
consumer. 

Incidental,  with  this  excessive  cost  of  capital,  we  have 
always  had — always  will  have — a  large  degree  of  finan- 
cial demoralization — uncertainty,  poverty,  bankruptcy, 
manipulation  by  capitalists  and  speculators,  resulting, 
to  smaller,  innocent,  ill-informed  investors,  in  loss  to 
them,  and  gradual  transfer  of  their  capital  holdings  to 
big  financiers — building  up  multi-millionaires. 

Let  Uncle  Sam  supply  all  this  twenty  billion  dollars 
capital  by  government  ownership  {not  "government 
operation" — see  further  on)  and  abundant  capital  can 
be  had  at  a  cost  not  to  exceed  3  per  cent,  per  annum,  a 
saving  of  fully  six  hundred  million  dollars  a  year  in 
capital-cost,  such  saving,  not  for  benefit  of  "capitalists," 
but  for  producers  and  consumers,  in  reduced  cost  of 
transportation.  Probably  the  saving  would  be  near,  if 
not  quite,  a  billion  dollars  a  year — at  least  one-half  of 
present  capital-cost. 

"Money  for  3  per  cent.?"  Yes,  at  that,  or  less,  all 
Uncle  Sam  can  find  profitable  use  for — certain  as  gravi- 
tation— not  by  "fiat,"  but  by  common-sense,  square-deal, 
free  trade  in  finance ;  justice  to  thrift  and  industry.  Un- 
shackle our  present  Postal  Savings  Bank  and  in  less  than 
one  year  it  will  have  over  eighty  million  depositors,  with 
such  resulting  stimulus  to  thrift,  industry  and  enterprise 
as  the  world  has  never  seen,  with  scores  of  billions  of 
dollars  in  deposits.  For  particulars  as  to  this  see  "The 
Industrial  Savings  Act"  already  before  Congress,  with 
speech  of  Senator  Sheppard  explaining  and  illustrating 
how  and  why. 

This  "Postal  Bank"  reference  is  not  essential  to  the 
"Automatic  Railroad  Regulator"  idea.  If  you  choose  to 
let  "Money  Interests"  finance  government  ownership  at  a 
higher  rate,  it  can  be  done  and  still  save  one-half  in  the 


JUSTICE  AND  PRACTICAL  SENSE  7 

cost  of  capital,  but  such  excess  cost  is  needless,  and  un- 
justly fastens  that  much  more  perpetual  tax  on  cost  of 
transportation. 

With  government  ownership  (not  operation),  thus, 
would  come  the  greatest  conceivable  financial  efficiency 
and  strength. 

Now  let  follow  the  highest  conceivable  efficiency  of 
interested,  alert,  intelligent  personal  initiative,  Private 
Operation,  under  a  one-unit  system  and  universal  con- 
trol in  manner  as  follows: 

Private  Operation,  not  by  "capitalists,"  inevitably  in- 
terested to  get  in  "dividends,"  and  by  direct  and  indirect 
ways,  devious  and  otherwise,  all  that  can  be  made  out 
of  transportation,  but: 

Private  Operation  by  those  "Who  (now  and  always 
will)  Pay  the  Freight"  (human,  included)  and  whose 
vital  interest  it  is  to  secure  the  highest  possible  effi- 
ciency of  service  at  the  least  possible  cost. 

These  Men  Who  Pay  the  Freight  include  the  great 
mass  of  the  ablest  business  men  of  the  nation,  manufac- 
turers, merchants,  farmers — men  who  are  always  "on 
the  spot,"  at  every  great  terminal,  at  every  small  country 
station — always  with  eyes  open  to  know  what  ought  to 
be  done  and  how  to  do  it,  "self -interest"  always  "prod- 
ding" them,  "keying  them  up"  to  "get  results"  at  least 
cost — meaning  for  them,  highest  profit. 

Organize  these  Men  Who  Pay  the!  Freight  precisely 
as  stockholders  are  always  organized,  giving  each  a  vote 
in  control  and  operation  according  to  the  amount  of  his 
interest — a  vote  for  EACH  $100  in  freight  he  pays  annu- 
ally ( smaller  patrons  might  have  one  vote). 

These  Men  Who  Pay  the  Freight,  automatically  and 
vitally  interested  to  secure  best  results,  would  elect  (com- 
monly elect  the  men  now  in  service — thereafter  inter- 
ested to  serve  Freight-Payers  instead  of  Capitalists) — 
would  elect: 


8  PEACE  AND  PROSPERITY  VIA 

(a)  Local  Transportation  Boards   (say  of  three 
tor  five)  at  each  station  or  city. 

(b)  Line,  or  Division  Boards  of  Directors,  chosen 
by  patron  Freight  Payers  on  that  line. 

(c)  General  Board  of  Directors,  having  control 
over  all  roads  and  interests  the  nation  over. 

These  Boards  of  Directors  would  employ  and  direct 
and  control  as  similar  Boards  do  now. 

But  these  new  Boards  are  under  the  "Men  Who  Pay 
the  Freight,"  and  are  interested  to  SERVE,  to  reduce 
cost,  not  to  get  "dividends" — "profits"  for  capitalists. 

The  only  "Capitalist"  interested  is  Uncle  Sam  (the 
"genus"  name  for  Liberty  Bond  Holders — and  of  the 
eighty  million  or  more  Depositors  in  the  Unshackled 
Postal  Savings  Bank)  and  "Uncle"  wants  a  "dividend" 
of  only  3J/2  per  cent.  (l/2  per  cent,  above  the  3,  cost,  the 
same  as  the  Allies  pay).  Freight  charges  must  inevit- 
ably be  high  enough  to  cover  cost  of  operation  and  of 
up-keep,  and  this  small  dividend.  Any  Railroad  Earn- 
ings above  these  essentials  would  come  back  to  Freight 
Payers,  in  reduced  cost  of  freight — and  thus  come  to  all 
Producers  and  all  Consumers  in  increased  price  for  pro- 
ducts, or  in  reduced  Cost  of  Living. 

So  organized,  the  entire  National  Transportation  ser- 
vice would  be  One  Unit,  one  management,  no  waste  or 
superfluity  of  equipment  in  one  place,  poverty,  strangu- 
lation in  another — no  cut-throat  competition  between 
Lines,  no  favoritism  to  special  shippers,  no  opportunity 
for  "graft,"  no  "side"  Refrigerator,  Express,  Despatch 
or  other  vampire  "systems." 

The  eyes  of  Men  Who  Pay  the  Freight  are  every- 
where, watching  for  waste,  steals,  blunders,  inefficiency 
— or  watching  to  reward  and  promote  Efficiency. 

Every  manufacturing  shipper,  every  merchant  who 
has  something  to  sell,  seeking  larger  market,  each  with  a 
pro  rata  vote  in  control  according  to  his  railroad  patron- 


JUSTICE  AND  PRACTICAL  SENSE  9 

age,  will  be  interested  to  extend  railroad  lines  into  new 
territory,  to  double-track,  or  quadruple  track,  improve 
terminals,  wherever  such  improvements  or  extensions 
can  be  made  to  earn  over  3y2  per  cent  on  additional  capi- 
tal, which  Uncle  Sam  is  always  ready  and  able  to  supply 
when  it  can  be  of  service  to  his  people. 

"Increase  Uncle  Sam's  debt  another  twenty  billion  dol- 
lars— and  "then  some  more" !  Not  necessarily  this 
amount — pay  the  just  value  of  the  property — a  different 
problem  to  be  solved  when  we  come  to  it. 

It  will  not,  in  fact,  be  any  real  "increase"  of  debt  at 
all — practically  a  big  decrease — because  these  Men  Who 
Pay  the  Freight  now,  virtually  owe  it  and  are  daily  pay- 
ing it  to  railroad  stockholders  and  bondholders  in  the 
form  of  freight  charges;  the  form  of  debt  is  changed, 
only,  to  Uncle  Sam — practically  cut  in  half  my  reducing 
one-half  the  interest-cost.  There  is  "solid"  money-earn- 
ing asset  for  every  dollar  'of  this  debt. 

"Out  of  politics !"    Completely  out  of  politics. 

We  all  know  how  sinister  and  dominating  the  influence 
of  railroads  in  politics  has  been  in  the  past.  "All  the 
traffic  will  bear."  "The  public  be  damned."  Bribery  and 
blackmail,  favoritism,  secret  rates,  cut-throat,  wrecking 
competition,  strangulating  regulation. 

With  the  railroads  completely  turned  over  to  "Gov- 
ernment ownership  and  operation"  with  so-called 
"statesmen,"  politicians,  in  charge,  and  with  about  two 
million  employees,  to  help  "regulate"  the  roads,  (or 
regulate  politics  and  the  Government)  what  riot  of 
inefficiency  and  disservice,  might  we  not  anticipate? 

The  "national  ownership"  here  purposed  has  for  one 
of  its  special,  most  important  objects  the  forestalling  and 
preventing  the  inefficient,  demoralizing  kind  of  "govern- 
ment ownership"  which  threatens  to  come,  if  it  is  to  be 
a  choice  between  that  and  the  "exploitation"  of  all  com- 
merce by  "capitalists." 


10  PEACE  AND  PROSPERITY  VIA 

Don't  talk  of  "regulation"  by  government!  We  have 
had  enough  of  it — incessant,  endless  "war,"  the  "inter- 
ests" regulating  government,  or  vice  versa,  meantime 
commerce  suffering! 

But,  with  Government  simply  owning  the  roads,  re- 
ceiving its  "first  lien"  3^  per  cent,  dividends,  and  the 
"self-interest"  of  "Men  Who  Pay  the  Freight,"  the  mass 
of  the  ablest  business  men  of  the  nation  supervising  the 
"OPERATION,"  there  would  naturally  result  absolute 
economic  peace  and  prosperity — utmost  efficiency  of  ser- 
vice, least  possible  cost  of  service. 

The  same  principles  apply,  obviously,  to  telegraph,  tele- 
phone and  other  public  service  utilities,  though  these  may 
not  be  equally  instant  with  the  transportation  problem. 

The  nation,  state,  or  municipality  can  "finance"  (no 
"subsidy" — nothing  akin,  self-support  being  assumed) 
the  patrons  (who  always  do  pay,  directly  and  indirectly, 
the  bills,  and  pay  dividends  on  capital)  controlling  "oper- 
ation," each  patron  with  a  vote  having  weight  in  propor- 
tion to  patronage,  thus  "automatically"  guaranteeing  the 
utmost  efficiency  of  service,  and  utmost  economy  in  cost 
of  service. 

Even  milk  service  in  big  cities,  the  city  financing,  milk- 
users  controlling  as  one  unit  the  buying  and  distribution, 
might  easily  cut  cost  of  milk  to  babies  and  all  others  fully 
one-fourth,  probably  one-third,  possibly  nearer  one-half. 

What  about  Labor  in  relation  to  this  transportation 
problem  ? 

Can  it  also  be  made  to  "automatically"  serve  efficiency 
and  economy  in  railroad  operation  ? 

Let  us  try. 

Labor  is  "worthy  of  its  hire" — according  to  scripture. 

It  pays  to  have  Labor  at  least  contented — pays  better 
to  have  it  interested — enthusiastic. 


JUSTICE  AND  PRACTICAL  SENSE          11 

Under  this  plan,  Labor  would  be  serving  millions  of 
"Freight-Payers,"  neighbors  whom  they  know  and  re- 
spect, instead  of  serving  a  limited  few  "Capitalists"  who 
(they  think)  seek  to  exploit  Labor,  and  there  would 
naturally  be  less  tendency  to  antagonism. 

Let  us  organize  the  "self-interest"  and  power  of 
Labor  precisely  the  same  as  we  have  organized  the  self- 
interest  and  power  of  the  Men  Who  Pay  the  Freight. 

Give  every  employee  a  vote  with  weight  in  proportion 
to  his  earnings — as  stockholders  always  have  weight  in 
proportion  to  investment — as  freight  payers  are  given  in 
present  plans  weight  in  proportion  to  the  freight  they 
pay;  so  will  a  man  have  influence  in  some  measure  in 
proportion  to  his  merit,  growing  influence  as  he  grows, 
which  will  interest  and  stimulate  him  to  grow. 

Let  Labor  elect  at  least  one  advisory  representative  to 
each  Board  that  has  to  do  with  railroad  operation,  and  so 
always  be  consulted — the  "higher  up"  men  of  the  future 
are  the  "small"  men  of  today.  Give  them  a  chance  to 
"grow,"  and  watch  them  grow — fast! 

And  from  the  lowest  section  hand  to  the  highest 
"Manager"  or  President  let  every  employee  have  at  least 
some  compensation  contingent  on  time  of  service,  faith- 
fulness, efficiency,  success,  as  shown  by  results.  All  this 
is  necessarily  a  question  of  detail,  to  be  largely  learned 
and  developed  by  experience.  The  free,  continual  con- 
sultation of  Labor  will  help  enormously  to  wise  solu- 
tions of  these  problems. 


12  PEACE  AND  PROSPERITY  VIA 


WILL  "U.  S.  AUTOMATIC  R.  R."  WORK? 

It  will  work,  certainly  as  gravitation ! 

It  mobilizes  to  the  full  the  power  of  "self-interest" 
and  personal  initiative,  and  puts  to  the  front,  in  charge, 
the  best  brain  and  energy  of  the  mass  of  business  men  of 
the  nation. 

"The  Men  Who  Pay  the  Freight"  are  of  practically 
unlimited  resource  of  capital  and  skill — they  are  the  sort 
of  men  who  "find  a  way  or  make  it." 

"Big  Business"  is  in  the  "same  boat"  with  "little  busi- 
ness/' the  one  with  no  possibility  of  advantage  over  the 
other — "pull  together"  is  inevitable,  and  "get  there"  is  the 
goal  for  all. 

Of  course  no  "machine"  was  ever  made,  the  "first  trial" 
of  which  did  not  show  room  for  improvement — some 
"adjustment"  here  and  some  "oil"  there.  The  "School  of 
Experience"  is  the  "best  ever"  for  teaching  the  way  to 
success,  and  here  we  have  the  school  of  experience. 

"The  Men  Who  Pay  the  Freight"  are  "practical"  men, 
who  take  hold  of  "things  as  they  are."  Railroad  Trans- 
portation is  "a  going  business"  and  the  men  now  in  charge, 
heretofore  representing,  working  for,  the  "owners"  who 
have  not  yet  been  paid  for  the  property,  but  will  be  paid, 
fairly,  the  value  they  can  help  to  prove  to  be  in  the  prop- 
erty. The  "owners'  self-interest"  makes  sure  their  "help" 
and  not  hindrance  in  this  "private  operation."  The  work- 
ers' "self-interest"  urges  all  to  "make  good"  and  hold 
their  positions,  or  win  promotion  to  better  ones.  The 
new  Board  of  Directors  elected  by  the  Men  Who  Pay  the 
Freight  take  over  the  "machine"  as  it  is,  with  practical, 
experienced  "crews"  in  charge,  and  will  simply  "speed 
up"  and  adjust,  improve,  strengthen,  enlarge,  multiply  as 
"practical  men"  know  how  to  do,  continuing  existing 
management,  present  employees,  except  as  experience 
shows  change  desirable. 


JUSTICE  AND  PRACTICAL  SENSE          13 


TEXT  AND  COMMENT  THEREON  OF 
A  BILL 

To  secure  the  utmost  financial  strength,  and  utmost 
economy  in  capital-cost,  by  National  Ownership  of  Rail- 
roads and  other  means  for  freight  and  passenger  trans- 
portation, by  land,  water,  or  air,  together  with  the  utmost 
efficiency  and  least  possible  cost  of  service  by  means  of 
Private  Operation  of  the  same. 

NOTE. — This  Bill  as  presented  is  meant  to  be  sug- 
gestive, rather  than  final;  some  points  are  even  tenta- 
tive. Committees  of  Senate  and  House  should  natu- 
rally improve  some  details. 

It  is  prepared  especially  with  the  hope  that  it  may 
be  put  before  "practical"  men,  merchants,  manufactur- 
ers, farmers — all  "Men  Who  Pay  the  Freight,"  pay  for 
up-keep  and  waste,  interest  on  R.R.  bonds,  all  divi- 
dends on  capital  stock,  whose  vital  business  suffers 
when  service  is  poor,  or  prospers  when  service  is  effi- 
cient— who  of  necessity  pass  along  to  producer  and 
consumer,  with  some  additions,  all  excess  cost  of  trans- 
portation. Surely  these  are  the  men  qualified  to  discuss 
and  solve  the  transportation  problem.  Why  not  put 
this  before  the  "Men  Who  Pay  the  Freight"  and  give 
them  a  chance  to  talk  and  suggest  ? 

Sec.  1.  There  is  hereby  created  the  U.  S.  National 
Transportation  Corporation,  the  capital  stock  of  which 
shall  be  measured  and  limited  only  by  the  need  of  service 
and  the  ability  to  use  profitably,  all  said  capital  stock  to 
be  subscribed  for,  owned  and  permanently  held  by  the 
U.  S.  Treasury. 

NOTE. — National  credit  is  to  be  used  in  very  large 
amount,  but  in  place  of  other  credit  already  existing, 
vastly  more  expensive  to  taxpayers ;  every  dollar  of  debt 


14  PEACE  AND  PROSPERITY  VIA 

will  represent  live  assets  earning  substantial  profit  for 
the  national  treasury. 

Sec.  2.  All  the  members  of  the  Cabinet  of  the  President 
of  the  United  States  shall,  ex  oficio,  be  directors  of  said 
corporation,  hereinafter  referred  to  as  ownership  direc- 
tors. 

(fl)  Said  ownership  directors  shall  by  majority  vote 
have  veto  power  concerning  any  matter  relating  to  the 
business  of  the  corporation,  and  by  unanimous  vote  shall 
have  initiative  power  and  final  authority  to  order,  in  any 
such  matter. 

(b)  Said  ownership  directors  shall  employ  and  com- 
pensate in  its  discretion  such  service  as  it  deems  neces- 
sary, including  the  service  of  the  existing  Uv  S.  Com- 
merce Commission,  for  the  adequate  oversight  of  all  mat- 
ters affecting  the  corporation  and  the  performance  of  du- 
ties, compensation  for  such  service  to  be  at  the  expense 
of  the  U.  S.  Government. 

(c)  It  shall  be  the  special  duty  of  said  ownership  di- 
rectors to  see  that  charges  for  Freight  and  Passenger 
Transportation  shall  be  maintained  adequately  high  to 
cover  all  expense  of  operation,  of  up-keep,  and  to  pay  into 
the  U.  S.  Treasury  a  semi-annual  dividend  of  one-half 
of  one  per  cent,  per  annum  in  excess  of  the  cost  to  the 
U.  S.  of  money  borrowed  for  investment  in  the  capital 
stock  of  the  corporation. 

(d)  Said  ownership  directors  shall  cause  to  be  issued 
and  sold  to  the  U.  S.  Postal  Savings  Bank,  or  otherwise, 
on  the  best  terms  possible,  U.  S.  bonds  ample  to  buy, 
build,  equip  and  supply  all  legitimate  capital  needs  for  the 
most  efficient  and  profitable  transportation  service  of  the 
nation. 

(e)  It  shall  be  the  further  special  duty  of  said  owner- 
ship directors  to  see  that  charges  for  transportation  shall 
be  uniform  and  just  to  all  shippers  and  passengers,  with- 


JUSTICE  AND  PRACTICAL  SENSE         15 

out  favoritism  to  any  individual  or  to  any  locality;  also 
to  see  that  all  purchases  and  contracts  having  to  do  with 
buying,  building,  equipping,  maintaining  or  operating  shall 
be  in  like  manner  without  favoritism  or  special  advantage 
to  any  one. 

Sec.  3.  The  operation  of  the  entire  transportation  sys- 
tem provided  for  by  this  Bill  shall  be  as  one  unit,  and 
not  as  many  competing  or  co-operating  lines  or  systems, 
and  shall  be  in  charge  of  Boards  of  Directors,  subject  to 
the  oversight  of  the  ownership  board  as  already  provided, 
to  be  chosen  as  provided  in  Sec.  4  hereof,  as  follows : 

(a)  A  National  Executive  Board  in  control  over  all, 
hereinafter  called  the  Operating  Board. 

(b)  Division  Boards  in  charge  of  such  lines  or  divisions 
as  the  Operating  Board  may  for  convenience  and  effi- 
ciency in  operation  designate. 

(c)  Local  Boards  in  charge  of  each  station,  city  or  lo- 
cality as  the  Operating  Board  may  designate. 

(d)  The  powers,  duties  and  compensations  of  the  Divi- 
sion Boards  and  Local  Boards,  and  the  number  in  each, 
not  less  than  three,  shall  be  such  as  the  Operating  Boards 
may  fix. 

Sec.  4.  The  members  of  each  of  said  Operating  Boards, 
Division  Boards  and  Local  Boards  shall  be  chosen  by 
election  in  January  of  each  year,  as  follows : 

(a)  The  Ownership  Directors  shall  first  cause  to  be 
ascertained  and  recorded  as  accurately  as  practicable, 
from  the  records  of  local  railroad  stations,  and  by  notices 
and  advertisements  to  railroad  patrons,  the  names  and 
addresses  of  all  who  in  the  calendar  year  1918  have 
paid  freight  or  passenger  transportation  in  excess  of  $10 
each,  and  the  amount  so  paid,  the  same  to  be  claimed  as 
having  been  paid  by  the  payor,  and  allowed  as  paid  by  the 
local  transportation  authorities,  such  payors  of  transpor- 


16  PEACE  AND  PROSPERITY  VIA 

tation  to  be  referred  to  hereinafter  as  Men  Who  Have 
Paid  the  Freight. 

(b)  Such  Men  Who  Have  Paid  the  Freight  shall  each 
be  allowed  one  vote,  and  an  additional  vote  for  each  $100 
additional  transportation  paid  in  said  calendar  year  1918. 
and  after  January  1,  1920,  each  of  the  Men  Who  Have 
Paid  the  Freight  shall  have  votes  in  like  manner  accord- 
ing to  the  amounts  paid  in  the  preceding  calendar  year. 

(c)  All  votes  of  Men  Who  Have  Paid  the  Freight,  and 
all  votes  of  members  of  said  Operating  Boards,  Division 
Boards  and  Local  Boards  shall  be  in  writing  or  printing, 
by  written  signature,  and  may  be  by  mail,  and  inability 
to  write  shall  be  deemed  waiver  of  the  right  to  vote,  and 
all  records  of  votes  shall  be  preserved  at  least  one  year. 

(d)  Men  Who  Have  Paid  the  Freight  may  each  vote 
for  his  choice  of  three  (or  more,  if  so  designated)  per- 
sons to  act  as  Local  Directors,  or  may  concentrate  his 
several  votes  on  one  person.    The  persons  so  chosen  as 
Directors  shall  each  have  weight  of  vote  in  his  Board 
according  to  the  number  of  votes  by  which  he  is  chosen. 
If  more  than  three   (or  the  designated  number)   have 
been  so  chosen  as  Directors,  those  so  chosen  shall  bal- 
lot repeatedly  among  themselves  till   the  properly  re- 
duced number  of  Directors  is  reached,  and  the  weight  of 
vote  of   each   Director  ascertained  by  the  number  of 
votes  concentrated  upon  him. 

(e)  Local  Boards  of  Directors  thus  chosen,  all  of 
them  along  the  line  of  the  division  of  which  they  are  a 
part,  shall  thereafter  meet  at  some  central  point  which 
the  Operating  Board,  or  in  first  instance  the  Owner- 
ship Board,  may  designate,  and  shall  in  a  similar  man- 
ner ballot  for  and  elect  a  Division  Board,  the  number 
of  members  of  which  shall  be  determined  by  themselves, 
till  finally  determined  by  the  Operating  Board.     Each 
member  of  said  Division  Board  shall  have  weight  of 


JUSTICE  AND  PRACTICAL  SENSE          17 

vote  according  to  the  number  of  concentrated  votes  he 
has  received. 

(/)  All  the  various  Division  Boards  so  chosen  shall 
thereafter  meet  as  appointed  by  the  Operating  Board,  or 
Ownership  Board,  and  shall  in  a  similar  manner  elect 
Directors  of  an  Operating  Board,  each  member  of  which 
shall  have  power  and  weight  of  vote  according  to  the 
number  of  votes  concentrated  in  his  election. 

NOTE. — This  choosing  of  Directors  is  a  simpler 
matter  than  describing  it.  It  is  a  mathematically  exact 
way  of  placing  power  in  the  hands  of  those  whom  the 
voters  esteem  the  most  capable  and  trustworthy.  The 
plan  is  based  on  the  principle  of  the  "proxy"  and  of 
"weight"  according  to  "money  invested,"  common  in 
corporate  business  generally.  The  result  will  be  that 
dominant  "natural  leadership"  will  lead;  two  or  three 
men,  or  possibly  even  one,  will  sometimes  have  more 
"power"  or  "weight"  than  all  the  other  members  of 
the  Board — because  voters  have  so  willed  it.  But 
"minority  representation"  is  there,  also,  with  its  due 
proportionate  influence. 

Sec.  5.  The  Operating  Board  shall  have,  subject  to  the 
superior  powers  of  the  Ownership  Board,  as  specified, 
complete  power  of  control  and  management  of  every- 
thing relating  to  the  functions  of  the  U.  S.  National 
Transportation  Corporation,  shall  employ,  direct,  and 
compensate  in  its  discretion  all  service  necessary.  It 
shall  have  the  fullest  power  of  eminent  domain  which 
this  Act  can  legally  convey,  to  take  over  land,  water  and 
ether  property  important  to  the  corporation,  with  rea- 
sonable promptness  thereafter  justly  paying  therefor 
with  capital  supplied  by  the  Ownership  Board.  This  is 
intended  to  include  the  right  to  take  coal,  iron  and  other 
mines  and  water  power,  rolling  mills  and  other  factories 
necessary  or  important  to  the  best  economic  transporta- 
tion service  of  the  nation,  but  not  for  exploitation  of 


18  PEACE  AND  PROSPERITY  VIA 

such  property.  It  shall  have  the  right  to  fix  and  alter 
charges  for  transportation,  without  favoritism  to  any, 
with  equal  rights  to  all  patrons,  without  unjust  advantage 
to  one  locality  over  another,  or  to  one  class  of  freight 
over  another;  provided,  however,  especially  that  trans- 
portation charges  shall  always  be  maintained  adequately 
high  to  provide  for  up-keep  of  all  the  property  of  the 
corporation  and  for  paying  semi-annually  into  the  U.  S. 
Treasury  of  a  dividend  of  one-half  of  one  per  cent,  in 
excess  of  the  cost  to  the  U.  S.  Treasury  of  the  money 
invested  in  the  capital  stock  of  the  corporation. 

Sec.  6.  In  the  event  of  the  death  or  disability  of  a 
member  of  the  Operating  Board,  Division  Board  or  Lo- 
cal Board,  the  remaining  members  may  choose  his  suc- 
cessor to  act  during  incapacity  or  till  the  next  annual 
election. 

Sec.  7.  The  existing  Railroad  Administration  shall  con- 
tinue until  the  Director  General  shall  receive  notice  from 
the  Operating  Board  that  it  is  ready  to  take  charge,  when 
the  property  shall  be  as  promptly  as  possible  turned  over 
to  it. 

Sec.  8.  As  soon  as  practicable  after  taking  over  the 
property  as  specified  in  Section  7,  the  Operating  Board 
shall  proceed  to  carefully  inventory  and  estimate  the 
value  thereof,  and  the  former  owners  shall  also  estimate 
its  value,  and  the  two  opposing  interests  shall  attempt  to 
agree  upon  value,  and  failing  to  agree  each  interest  shall 
choose  a  referee  and  those  two  referees  shall  agree  upon 
a  third,  and  the  majority  shall  determine  the  value.  In 
case  the  two  referees  shall  fail  to  agree  upon  a  third,  the 
President  shall  make  such  choice.  Upon  the  value  being 
so  determined  and  the  decision  being  approved  by  the 
Ownership  Board,  said  Ownership  Board  shall  cause  to 
be  issued  and  marketed  U.  S.  Bonds  and  make  payment 
to  the  original  owners.  In  the  meantime  rental  shall  be 
paid  to  the  original  owners  in  accordance  with  existing 


JUSTICE  AND  PRACTICAL  SENSE          19 

contracts  made  by  the  railroad  administration,  from  the 
operating  income  of  the  railroads. 

TRANSPORTATION    INCIDENTALS  AND   OBSERVATIONS 

The  greatest  of  all  the  forces  that  "do  things"  in  hu- 
man life  are  "self -interest"  and  "individuality" — the  one 
"does  it,"  the  other  "does  it  differently,"  and  contrast  and 
competition  of  the  "different"  incite  men  to  "get  there" 
lively. 

Nine-tenths  of  the  world's  work,  if  not  nearer  ninety- 
nine-hundredths  of  it,  is  thus  done  by  self-interest — life's 
luxuries  and  necessities  brought  to  our  doors  without 
hurry  or  worry  on  our  part. 

Mixed  with  all  this  thought  of  "self"  there  may  be, 
and  is  much  of  thought  of  justice  and  honor,  and  of  the 
spirit  of  "altruism" — which,  if  strongly  impregnate 
about  doubles  the  "horse  power"  of  the  "ego" — but  the 
prime  force  that  never  ceases  to  inspire  and  push  is 
"self-interest." 

Here  "hitched  up"  with  the  strongest  financial  re- 
sources and  power  the  world  has  ever  seen — the  meas- 
ureless credit  of  "Uncle  Sam,"  we  have  the  "self-interest" 
and  "individuality"  of  the  great  mass — practically  all — 
of  the  business  men  of  the  LL  S.,  manufacturers,  mer- 
chants, farmers.  Each  is  compelled  by  the  nature  of  the 
"hitch,"  when  he  works  for  "self-interest"  to  work  also 
for  the  interest  of  all. 

The  aim  is  necessarily  the  most  efficient  transportation 
service,  the  least  possible  cost — and  all  benefit,  no  pos- 
sible favoritism,  to  individual,  to  locality,  to  class  of 
freight. 

Local  Boards  of  Directors,  of  villages  or  larger  towns, 
or  great  terminal  cities,  are  chosen  by  the  local  patrons, 
Men  Who  Pay  the  Freight — chosen  from  among  them- 
selves, neighbors  who  know  each  other.  Those  most 
interested,  alert,  the  men  who  "get  things  done,"  inevita- 


20  PEACE  AND  PROSPERITY  VIA 

bly  come  to  the  front,  and  each  is  given  power  measured 
by  the  confidence  he  commands,  not  "equal  powers'*  (al- 
ways fiction,  not  fact,  for  some  one  "dominates"  in  al- 
most any  effective  board). 

In  small  places  the  Local  Board  will  probably  be 
three — and  a  dominating  alert  one  will  do  most  of  the 
work,  or  have  oversight  of  it.  In  larger  places  Boards 
will  be  larger.  Their  numbers,  their  powers,  duties,  com- 
pensations will  be  decided  by  the  great  Operating  Board 
of  the  National  Organization,  which  controls  and  orders 
everything,  as  a  General  Staff  controls  a  great  army. 

Once  a  year  all  the  Local  Board  members  meet  to- 
gether and  elect  a  superior  Division  Board  (which  will 
be  under  the  National  Operating  Board)  each  mem- 
ber being  given  "weight  of  vote"  according  to  the  con- 
centrated "weight  of  votes"  he  receives.  And  these 
various  Division  Boards  likewise  meet  and  elect  in  the 
same  manner,  with  same  "accumulated  weight  of  vote," 
the  National  Operating  Board,  the  number  of  members 
and  the  compensation  being  fixed  by  vote  of  the  Division 
Board  members.  The  National  Operating  Board  powers 
and  duties  are  fixed  by  the  law  organizing  the  corpora- 
tion. 

Each  Local  and  Division  Board  inevitably  has  its 
"interests" — to  get  the  most  and  best  service  at  the  least 
practicable  cost  for  its  locality  or  line.  It  is  always 
"on  the  spot,"  has  knowledge  and  initiative — and  "can 
get  anything  it  wants"  in  reason,  when  it  shows  that 
"what  it  wants"  will  "pay"  the  cost  of  the  capital  "what 
it  wants"  involves,  and  "something  more"  for  safety  of 
"Division"  and  for  the  national  system. 

If  capital  costs  (say)  3l/2  per  cent,  and  a  local  ele- 
vator, cotton,  or  potato  warehouse,  a  gigantic  hay  press, 
a  creamery,  a  new  "feeder"  trolley  freightrpassenger  line 
— anything  that  will  bring  business  to  the  road,  enlarge 
markets  for  shippers — if  any  or  all  can  be  made  to 


JUSTICE  AND  PRACTICAL  SENSE          21 

"earn"  10,  or  7,  or  even  4  per  cent,  (perhaps)  "Uncle 
Sam  is  rich  enough"  to  give  us  all  we  want — if  it  pays! 

And  the  records  show  "what  pays."  While  the  whole 
national  system  is  "one  unit,"  accounts  are  kept  so  it  is 
easy  to  tell  where  and  how  much  "income"  exceeds  cost 
of  investment,  or  vice  versa. 

At  the  great  city  terminals,  of  course,  is  where  the 
"one  unit"  idea  counts  most  and  shows  most  effectually 
— no  more  "competition,"  all  one  "happy  family"  seeking 
the  best  possible  "least-cost  service"  of  commerce  and 
travel. 

No  more  "vampire"  "inside,"  express,  refrigerator 
or  other  "systems,"  no  favored  "contractors"  for  better- 
ments, extensions,  to  suck  the  life-blood  profits  from 
Uncle  Sam's  Railroad.  The  national  Operating  Board 
has  its  own  engineers,  a  great  army  of  tested  officers  who 
can  organize  and  superintend  forces  that  can  do  anything 
that  can  be  done  by  "somebody  else  at  a  profit"  for  the 
Corporation.  If  sometimes  the  Corporation  buys,  "out- 
side," locomotives,  rails,  or  anything  else,  it  knows  from 
its  own  "cost  records"  in  its  own  shops  what  it  buys  is 
worth,  and  will  buy  for  its  own  "convenience"  and  not 
as  a  "favor"  to  a  big  "client"  or  "capitalist." 

WATER  AND  AIR  TRANSPORTATION 

Of  course  the  "Men  Who  Pay  the  Freight"  want  all 
possible  profitable  economic  facilities  for  transportation 
wherever  freight  or  passengers  want  to  go,  and  river  and 
canal  will  be  used  heavily,  all  as  "one  unit"  with  the  rail- 
roads— including  coast  and  Panama  Canal — and  why  not 
also  allow  Cuba,  West  Indias  generally  and  South 
America — and  why  stop  even  there  ? 

For  foreign  transportation  generally  a  separate  "Amerr 
can-Foreign  Transportation  Corporation"  might  well  be 
organized  along  the  same  lines  as  that  of  this  Inter-State 
Corporation,  to  be  "financed"  by  the  nation  and  "operated" 


22  PEACE  AND  PROSPERITY 

by  the  "Men  Who  Pay  Foreign  Freight" — vitally  inter- 
ested to  secure  the  greatest  possible  efficiency  of  service, 
and  least  possible  cost  of  service — small  shippers  (com- 
paratively) having  the  same  benefit  of  low  cost  as  the 
large  shippers  who  transport  millions  of  tons — low  cost, 
obviously  being  passed  on  for  benefit  of  producer  and  con- 
sumer. 

As  "ships  and  more  ships"  under  its  own  control  are  to 
be  counted  as  vital  for  the  future  prosperity  and  PEACE 
of  "Uncle  Sam"  and  the  world  generally,  this  "American- 
Foreign  Transportation  Corporation"  might  (with  per- 
haps independent  private  American  Citizen  transporta- 
tion) be  given  the  monopoly  of  one-half  the  total  foreign- 
American  transportation,  the  other  one-half  fairly  being 
left  open  to  competition  of  the  other  nations  of  the  world. 

Air  transportation  is,  of  course,  a  matter  of  future 
development.  The  "experimental  part"  of  it  will  doubt- 
less be  pressed  at  the  expense  of  the  U.  S.  Army,  Navy, 
and  Post  Office ;  the  U.  S.  A.  A.  R.  will  "take  a  hand  in 
the  game"  only  to  the  extent  that  it  can  be  done  with 
early  anticipated  profit  in  view. 


FINANCIAL  JUSTICE  AND 
INDUSTRIAL  SAVINGS 

"For  Uncle  Sam  and  World  Peace." 
"UnsJiackle  the  Postal  Savings  Bank." 

The  first  quotation  above  was  the  title  of  a  portion  of 
this  paper  issued  as  an  appeal  to  immeasurably  help  win 
the  world  war  by  a  bit  of  plain  financial  justice  to  indus- 
trial patriots.  The  war  is  won  but  "godliness  is  profit- 
able" for  time  of  peace  as  well  as  time  of  war,  so  we  still 
give  the  quotation  place. 

To  get  anywhere  we  must  always  "start  where  we  are" 
— start  with  things  as  they  ire. 

We  now  have  a  Postal  Savings  Bank — we  start  with 
that. 

Every  other  savings  bank  in  the  world  makes  the  pre- 
tense, at  least,  of  security  for  depositors  the  largest  prac- 
ticable returns  for  their  money,  with  absolute  security, 
and  perfect  availability.  Uncle  Sam's  Postal  Savings 
Bank  is  "shackled"  by  the  opposite  rule — it  attempts  to 
get  as  much  money  as  possible  from  depositors  for  the 
least  interest  possible. 

There  were  at  one  time  about  seven  hundred  thousand 
depositors,  almost  entirely  limited  to  poor,  but  provident, 
ignorant,  timid  foreigners — so  limited  by  the  fact  that  no 
intelligent  American  will  deposit  in  the  Postal  Bank  under 
present  dishonorable  restrictions. 

These  seven  hundred  thousand  timid,  ignorant  deposi- 
tors have  placed  about  one  hundred  and  forty  million  dol- 
lars in  the  Postal  Bank,  for  which  they  get  the  ridiculous 

23 


24  PEACE  AND  PROSPERITY  VIA 

(wicked)  rate  of  two  per  cent,  (only)  interest.  What  is 
done  with  their  money?  Instead  of  giving  Uncle  Sam 
the  benefit  of  the  money,  the  benefit  of  the  low  two  per 
cent.,  ninety-five  per  cent,  of  the  money  is  turned  over  to 
bankers  for  two  and  a  quarter  per  cent. — and  the  bankers 
loan  it  to  Uncle  Sam  for  four  and  a  half,  or  loan  it,  pos- 
sibly, to  farmers  or  others  for  productive  purposes  at  6 
per  cent,  or  MORE,  plus  commissions  to  somebody. 

Is  this  the  "square  deal"?  Is  this,  if  technically  "hon- 
est," honorable?  Is  it  "godly"? 

Shall  you  and  I  "stand  by  consenting,"  like  Saul  at 
Stephen's  stoning,  while  such  wrong  is  done?  And  if  a 
bank  accepts  the  benefit  of  this  "2-per-cent.  money,"  does 
it  not  more  than  "hold  the  clothes  of  them  that  stoned" — 
hold  some  of  the  contents  of  the  clothes  of  then*  that} 
are  stoned?  Do  editors,  who  join  the  "conspiracy  of 
silence,"  speaking  no  word  of  protest,  or  of  exposure  of 
wrong — are  they  guilty  of  "hush  money"  in  accepting 
"financial  advertising"  and  "keeping  still"?  One  hesi- 
tates to  believe  honorable  bankers  and  editors  consciously 
"guilty" — "they  know  not  what  they  do"  is  sad  truth 
often  applying. 

And  what  about  the  "wrong" — (and  the  economic 
folly!)  of  excluding  from  any  use  of  the  Postal  Savings 
Bank  the  scores  of  millions  of  intelligent,  thrifty,  patrio- 
tic Americans  by  limiting  interest  to  2  per  cent,  and  by 
limiting  the  right  to  deposit  at  all  more  than  a  petty  sum 
instead  of  inviting  "without  limit"  as  commercial  banks 
always  do?  "Limit  2  per  cent.,"  when  the  market  price 
for  money  is  from  twice  to  five  times  two ! 

We  now  propose  : 

"A  Bill  to  amend  the  Law  relating  to  the  Postal  Sav- 
ings Bank,  in  the  interest  of  justice  to  depositors,  also 
in  the  interest  of  farmers,  and  other  small  industrial  bor- 
rowers of  money,  and  in  the  interest  of  the  nation  at 
large." 


JUSTICE  AND  PRACTICAL  SENSE          25 

In  the  interest  of  depositors — of  borrowers — of  the 
nation  at  large;  is  there  any  other,  any  special  limited 
class,  or  favored  few,  whose  "interests"  shall  dictate  and 
distort  the  plan  and  purpose  of  the  law  of  the  Postal 
Savings  Bank  ?  Patriotism  says  no ! 

Justice  stupendously  stimulates  patriotism.  "Hyphen- 
ated" depositors  in,  and  producing  borrowers  from,  an 
unshackled  Postal  Savings  Bank  would  be  few,  and 
quickly,  "automatically"  cured! 

In  the  interest  of  Depositors : 

The  "Unshackled"  Postal  Bank  we  are  attempting  to 
rebuild  on  a  basis  of  mathematically  exact  justice.  The 
first  man  to  rightly  claim  "justice"  from  it  and  all  con- 
cerned, is  the  man  who  has  the  money — the  depositor, 
whether  he  has  brought  his  hard-earned  hoard  of  $10  or 
$1,000,000.  He  is  "inalienably"  entitled  to  get  for  the 
use  of  that  money  the  most  that  anybody  will  give  for  it, 
with  ample  security,  just  as  the  farmer  is  entitled  to  get 
the  same  for  his  wheat,  or  the  workman  for  his  labor. 

In  the  interest  of  Borrowers: 

The  man  who  wants  to  borrow  money  has  no  "rights'" 
in  the  case  till  he  is  able  to  offer  satisfactory  security,  then 
the  borrower  who  will  give  the  most,  whether  he  is  bank- 
er, barber,  butcher  or  farmer,  has  the  right  to  get  it — the 
amount  he  will  pay  for  its  use  is,  presumably,  the  legiti- 
mate measure  of  his  need,  or  of  his  ability  to  use  at  high 
profit. 

But,  given  a  "square  deal"  to  both  depositor  and  bor- 
rower, no  fear  but  in  this  rich  nation,  there  will  be  plenty 
of  money  to  "go  round,"  at  a  fair  rate  of  interest — both 
better  and  fairer  than  either  (average  man)  gets  now. 

"Cheap  money"  never  can  exist,  as  it  is  imagined  by 
many,  except  as  it  is  made  cheap  by  some  "hocus  pocus" 
and  injustice  to  somebody,  in  the  end  the  taxpayer,  which, 
ultimately  means  more  the  man  who  labors  than  anybody 
else. 


26  PEACE  AND  PROSPERITY  VIA 

The  "cheapest  money"  possible  will  come  about  pre- 
cisely as  will  cheap  wheat  or  cheap  shoes — by  the  pro- 
ducer's increasing  ability  to  get  larger  "crops"  for  his 
labor.  When  we  "all  get  rich"  (or  more  of  us)  money 
will  go  begging  for  borrowers  at  a  fraction  of  present 
rates  of  interest. 

The  "justice  for  the  farmer"  (and  all  who  labor) 
we  seek  via  an  unshackled  Postal  Savings  Bank  is  that 
he  shall  have  the  right  and  ability  to  borrow  money  as 
cheaply  as  anybody,  even  the  banker,  on  equal  security. 

Here  is  provided  the  "square  deal" — so  universally 
popular  with  patriotic  Americans — "free  trade"  in  finance, 
money,  and  credits,  not  special  privilege  to  bankers,  farm- 
ers, or  any  other  class. 

The  following  Bill,  here  slightly  amended,  has  already 
been  presented  to  Congress,  in  two  successive  sessions, 
introduced  by  Senator  Morris  Sheppard  of  Texas.  It 
will  be  again  introduced,  in  Senate  and  House,  till  it  gets 
consideration.  As  its  plans  are  much  broader  in  scope 
than  those  of  the  original  Postal  Savings  Bank,  it  is 
given  the  title 

THE  INDUSTRIAL  SAVINGS  ACT. 

"Section  1.  Be  it  enacted  by  the  Senate  and  House  of 
Representatives  of  the  United  States  of  America  in  Con- 
gress assembled,  That  the 'short  title  of  this  act  shall  be 
The  Industrial  Savings  Act." 

"Sec.  2.  All  the  members  of  the  President's  Cabinet 
shall,  ex  oficio,  constitute  a  board  of  trustees  for  the  ad- 
ministration of  this  act,  hereinafter  to  be  referred  to  as 
the  Industrial  Savings  Board." 

These  officials  broadly  represent  all  the  basic  economic 
interests  of  the  nation.  They  are  appointed  by  the  Presi- 
dent and  confirmed  by  the  Senate.  They  guide  and  shape 
the  policy  of  the  bank  established  by  this  bill,  within  the 


JUSTICE  AND  PRACTICAL  SENSE         27 

very  definite  limits  which  it  provides.  They  will  not  have 
time  for  the  work  in  detail,  but  they  will  fashion  general 
policies,  choose  and  supervise  competent  heads  and  prin- 
cipal employees,  who  will  do  the  work,  under  the  safe, 
businesslike  rules  of  the  Civil  Service  Commission. 

'Sec.  3.  For  the  proper  and  efficient  organization  and 
conduct  of  the  business  of  the  Industrial  Savings  Board 
it  shall  appoint,  under  the  rules  of  the  Civil  Service  Com- 
mission, a  first  chief,  a  second  chief,  and  a  third  chief, 
having  such  powers  and  duties  as  the  board  may  desig- 
nate ;  also  such  other  assistants,  attorneys,  and  other  em- 
ployees as  the  board  may  consider  necessary.  The  com- 
pensation of  the  persons  so  appointed  and  other  expenses 
of  operation  under  this  act  shall  be  such  as  the  Industrial 
Savings  Board  may  authorize,  and  shall  be  paid  from  the 
profits  of  the  Postal  Savings  Bank." 

This  section  takes  the  Postal  Savings  Bank  out  of  poli- 
tics, and  provides  that  expense  of  operation  shall  be  paid 
from  the  profits  of  the  bank  by  depositors  and  borrowers, 
instead  of  being  taken  from  the  pockets  of  taxpayers  by 
appropriations  from  the  Treasury.  The  wisdom  and  fair- 
ness of  this  section  would  seem  to  be  beyond  question. 

"Sec.  4.  The  Industrial  Savings  Board  shall,  as  soon  as 
possible,  take  over  the  control  of  the  existing  Postal  Sav- 
ings Bank,  the  details  of  its  administration  to  continue  in 
connection  with  the  post  offices  throughout  the  country, 
under  the  direct  supervision  of  the  Postmaster  General 
acting  for  the  board. 

"Sec.  5.  As  soon  as  arrangements  can  be  made  therefor 
every  post  office,  postmaster,  and  all  letter  carriers  and 
other  post  office  employees  shall  hereafter  be  made  to 
serve  the  people  through  the  Postal  Savings  Bank  as  they 
now  serve  them  for  letters,  money  orders,  registered  let- 
ters and  parcel  post,  without  limitation,  the  manner  of 
such  service  being  as  in  this  act  provided,  and  all  limita- 


28  PEACE  AND  PROSPERITY  VIA 

tions  on  the  amount  of  deposits  in  the  Postal  Savings 
Bank  are  hereby  removed. 

"Sec.  6.  Postmasters  and  other  employees  in  the  service 
of  the  Postal  Savings  Bank  at  the  time  of  the  transfer  of 
said  bank  to  the  Industrial  Savings  Board  shall  continue 
in  office  until  it  is  found  from  experience  that  any  one  of 
them  is  inefficient,  when  such  employee  may  be  removed 
according  to  rules  and  regulations  which  the  board  shall 
establish,  with  the  approval  of  the  Civil  Service  Commis- 
sion, and  the  successors  of  those  who  may  be  removed 
shall  be  appointed  under  the  rules  of  the  Civil  Service 
Commision." 

The  Post  Office  Department  is  already  one  of  the  most 
enormous,  best  organized,  best  equipped,  and  best  con- 
ducted business  plants  in  the  world.  In  connection  with 
the  enlarged  Postal  Savings  Bank  it  is  proposed  almost 
to  double,  or  more  than  double,  its  utility  at  an  increase 
of  expense  remarkably  small  when  results  are  considered. 
This  act  will  establish  within  the  Post  Office  Department 
the  largest,  strongest  and  mose  useful  financial  institution 
in  the  world. 

There  is  to  be  no  limitation  as  to  the  amount  anyone 
may  deposit.  Letter  carriers,  rural  and  city,  must  accept 
deposits  for  the  Postal  Savings  Bank,  and  deliver  receipts 
as  they  must  accept  and  deliver  letters,  money  orders  and 
parcels.  Also  they  may,  if  desired,  take  certificates  of 
deposit  and  checks  to  the  bank,  cash  them,  and  return  the 
proceeds  to  the  owner.  They  are  agents  both  of  the  bank 
and  the  people.  What  a  service  this  will  be  to  the  masses 
of  the  people,  who  need  not  leave  their  homes  or  other 
places  of  business  in  order  to  deposit  their  savings  or  draw 
funds  as  they  may  need  them!  The  Government  thus 
maintains  a  perpetual  open  door  to  thrift  and  economy, 
the  great  permanent  foundation  of  general  prosperity. 
See  also  Section  18. 

Every  existing  bank  in  the  United  States,   in  good 


JUSTICE  AND  PRACTICAL  SENSE          29 

standing,  as  well  as  every  post  office  and  letter  carrier, 
may  receive  deposits  and  make  payments,  and  the  banks 
may  make  loans,  for  the  Postal  Savings  Bank,  as  provided 
further  on  in  this  bill. 

Taking  our  population  in  1910  (now,  of  course,  largely 
exceeded)  and  the  deposits  in  the  existing  Savings  Banks 
of  the  State  of  Connecticut  (which  are  far  from  being 
"unshackled"  as  here  provided),  as  a  basis  of  comparison, 
the  nation  would  have  in  the  Postal  Savings  Bank  54,- 
074,000  depositors  (instead  of  a  beggarly  600,000  as 
now)  and  $27,987,000,000  deposits  instead  of  only  about 
140  millions  as  now. 

These  big  figures  are,  in  fact,  less  than  half  as  large 
as  should  be  the  reality,  for  reasons  which  will  appear 
further  on. 

Note  that,  incidentally,  here  is  legitimate  "government 
guaranty  of  deposits,"  simply  because  "Uncle  Sam"  is 
"custodian,"  as  he  is  for  money-order  money,  and  one  is 
"dead  sure"  of  getting  out  what  is  put  in.  No  "runs"  on 
"Uncle  Sam's"  Postal  Savings  Bank  "for  fear,"  as  is 
possible  with  all  other  banks. 

"Sec.  7.  Of  the  funds  which  are  now  or  may  hereafter 
be  deposited  in  the  Postal  Savings  Bank,  not  to  exceed 
25  per  cent,  of  the  balance  of  deposits  at  any  time,  may, 
in  the  discretion  of  the  Industrial  Savings  Board,  be  in- 
vested in  the  bonds  of  the  United  States,  bearing  3  per 
cent,  interest,  or  bought  in  the  open  market  at  the  lowest 
obtainable  price  or  bought  at  such  price  from  the  Treas- 
urer of  the  United  States.  Any  portion  of  said  bonds 
may,  in  the  discretion  of  the  board,  be  sold  in  the  open 
market  at  the  highest  obtainable  price  or  sold  to  the 
United  States  Treasury  at  such  price.  In  times  of  war 
the  bond  investment  specified  may  be  increased  in  any 
amount  up  to  90  per  cent,  of  the  balance  of  deposits,  and 
the  rate  of  interest  on  bonds  increased  to  4  per  cent.,  or  in 
the  discretion  of  the  Industrial  Savings  Board." 


30  PEACE  AND  PROSPERITY  VIA 

This  section  affords  financial  preparedness  for  the  na- 
tion on  a  scale  hitherto  unparalleled.  The  investment  in 
United  States  bonds  is  an  opportunity,  not  a  requirement. 
The  Postal  Savings  Bank  will  naturally  tend  to  absorb 
all  available  United  States  bonds  on  the  market,  and  thus 
tend  to  reduce  the  interest  rate  the  United  States  will 
have  to  pay  for  loans.  The  right  to  sell  any  portion  of 
the  bank's  United  States  bonds  in  case  of  need  provides 
a  liquid  reserve  power  that  is  not  excelled,  if  indeed  it  is 
equalled,  in  the  financial  world,  since  the  bonds  of  the 
United  States  have  a  world  market  well-nigh  without 
limit. 

While  the  sale  of  U.  S.  bonds  will  be,  as  now,  open 
to  individual  buyers,  and  such  sale  should  be  in  amounts 
of  billions  of  dollars,  it  is  here  contemplated  that  the 
great  mass  of  small  buyers  will  prefer  that  their  own 
Postal  Savings  Bank  shall  buy  and  hold  the  U.  S.  bonds 
for  them,  their  personal  individual  holdings  being  Certifi- 
cates of  Deposit  in  the  Postal  Savings  Bank,  which  are 
always  instantly  available  at  par  (as  deposits  in  solvent 
banks  always  are  available)  and  which  pay  depositors  ap- 
proximately the  same  rate  of  interest  as  the  U.  S.  bonds. 

Indeed,  Certificates  of  Deposit  in  the  Postal  Savings 
Bank  should  earn  depositors  even  higher  rates  of  interest 
than  do  the  U.  S.  bonds,  because  much  of  the  bank  de- 
posits, being  loaned  "to  highest  bidders"  offering  good 
security,  will  command  higher  rates  of  interest  than  the 
U.  S.  need,  or  should  pay. 

"Sec.  8.  No  other  investment  of  the  funds  deposited 
shall  be  made,  but  with  the  exception  of  a  working  re- 
serve, the  amount  of  which  shall  be  determined  by  the 
Industrial  Savings  Board,  the  balance  of  the  funds  shall 
be  loaned  at  the  highest  obtainable  rate  of  interest  on 
what,  in  the  discretion  of  the  Industrial  Savings  Board, 
is  considered  as  adequate  security,  in  manner  as  follows 
and  as  in  this  act  further  provided: 


JUSTICE  AND  PRACTICAL  SENSE          31 

(a)  Preference  shall  be  given — 

(1)  To  small  loans  over  large  loans. 

(2)  To  short-time  loans  over  long-time  loans. 

(3)  Loans  adequately  secured  by  readily  market- 

able collateral  over  loans  on  real  estate  or 
other  less-readily  marketable  security. 

(b)  In  accordance  with  the  above  the  board  shall,  from 
time  to  time  fix  the  rate  of  interest  to  be  charged  accord- 
ing to  the  supply  of  and  the  demand  for  loanable  funds, 
the  profit  and  security  of  the  depositors  being  the  basis 
of  decision,  the  maximum  rate  for  loans  not  to  exceed  5 
per  cent,  per  annum. 

(c)  The  borrower  shall  always  be  required  to  protect 
the  market  value  of  his  collateral,  as  is  customary  with 
other  banks  making  similar  loans,  either  reducing  the 
loan  or  providing  additional  security  in  case  of  falling 
market. 

"Sec.  9.  That  the  Industrial  Savings  Board  shall  give 
clear  and  ample  publicity  to  its  rulings  as  to  character  of 
securities  required  for  loans  and  the  terms  of  such  loans, 
under  the  following  limitations : 

(a)  Loans  not  to  exceed  95  per  cent  of  the  market 
value  of  United  States  bonds  or  the  bonds  of  States. 

(b)  Not  to  exceed  90  per  cent,  of  the  market  value  of 
such  other  securities  as  are  now  admissible  investments 
under  the  existing  laws  of  New  York  or  Massachusetts 
for  savings  banks  or  as  are  estimated  by  the  Industrial 
Savings  Board  as  of  equivalent  good  standing. 

(c)  Not  to  exceed  85  per  cent,  of  the  market  value  of 
wheat,  cotton,  or  other  non-perishable  products,  so  called, 
in  safe,  adequately  insured  public  storage,  under  regula- 
tions as  the  board  may  prescribe. 

(d)  Loans  against  marketable  collateral  shall  be  made 
at  any  Bank  of  Issue  and  Redemption  provided  for  un- 


32  PEACE  AND  PROSPERITY  VIA 

der  Section  15  of  this  act,  in  accordance  with  rules  and 
regulations  made  by  the  Industrial  Savings  Board." 

These  sections  contain  conservative  and  practical  pro- 
visions insuring  the  safe  and  proper  conduct  of  the  bank. 
The  borrower  must  protect  the  market  value  of  his  col- 
lateral, and  no  collateral  is  accepted  at  its  full  market 
value.  All  borrowers  are  on  an  equal  footing — the  bank- 
er, the  merchant,  the  farmer,  the  millionaire,  the  man  of 
limited  means.  If  any  preference  is  shown  at  all,  it  is  to 
the  small  loan  over  the  large  one.  The  farmer  is  enabled 
to  borrow  money  on  non-perishable  products,  properly 
stored,  to  the  extent  of  85  per  cent,  of  their  value. 

"No  other  investments  shall  be  made."  The  bank  is  to 
take  no  risks  on  rise  or  fall  of  market  prices.  It  will  loan 
only  against  good  security,  the  borrower  taking  all  mar- 
ket risks. 

The  laws  of  New  York  and  Massachusetts  are  referred 
to  above  merely  as  examples  of  laws  defining  security. 
All  the  provisions  of  these  laws  may  not  be  found  applic- 
able to  the  Postal  Savings  Bank,  especially  those  relating 
to  local  bonds.  The  savings  bank  laws  of  all  the  States 
and  of  foreign  countries  should  be  studied  and  their  best 
features  adopted  and  covered  by  rulings  of  the  board. 

"Sec.  10.  Not  to  exceed  50  per  cent  of  the  deposits  in 
hand  at  any  time  may  be  loaned  for  such  length  of  time, 
not  to  exceed  50  years,  as  the  Industrial  Savings  Board 
may  specify  in  its  regulations,  and  with  or  without  amor- 
tization, payments,  as  the  borrower  may  prefer,  to  an 
amount  not  to  exceed  one-half  the  appraised  value,  on 
unencumbered  real  estate  in  States  and  Territories  where 
laws  for  the  protection  of  creditors  are  by  the  Industrial 
Savings  Board  deemed  adequate  and  fair,  in  manner  as 
follows : 

(a)  Through  any  national  bank  or  other  incorporated 
bank  or  corporation  whose  business  is  dealing  in  or  guar- 
anteeing real  estate  mortgages  and  which  is  subject  to  the 


JUSTICE  AND  PRACTICAL  SENSE          33 

examination  and  control  of  the  United  States  Treasury 
or  of  the  banking  department  of  any  State  which  in  the 
estimation  of  the  Industrial  Savings  Board  adequately 
protects  depositors,  loans  may  be  made  to  an  amount  at 
one  time  outstanding  not  to  exceed  ten  times  the  capital 
and  surplus  of  the  bank  or  corporation,  which  shall  be 
required  to  guarantee  the  prompt  payment  of  the  princi- 
pal and  interest  of  the  loans  made  through  said  bank  or 
corporation. 

(b)  The  bank  or  corporation  shall  be  entitled  to  a  com- 
mission of  5  per  cent  of  the  interest  paid  on  such  loan  by 
the  borrower  (or  such  less  per  cent  as  the  board  may  pre- 
scribe), who  shall  not  be  subject  to  any  other  charge  ex- 
cept the  necessary  expense  of  examination  of  title  and 
drawing  papers,  which  charge  may  be  fixed  by  rules  of 
the  Industrial  Savings  Board,  all  terms  and  commissions 
to  be  uniform  throughout  the  United  States." 

Note  that  loans  on  real  estate  are  to  be  made  through 
banks  and  other  financial  institutions  of  established  stand- 
ing which  guarantee  principal  and  interest,  .for  a  small 
commission  on  the  interest  paid.  The  borrower  pays  the 
expense  of  examining  title,  drawing  papers,  and  so  forth. 
Savings  banks  generally  lend  more  than  50  per  cent  of 
their  deposits  on  real  estate,  while  building  and  loan  asso- 
ciations invest  in  this  way  nearer  100  per  cent  of  their 
funds.  The  banks  through  which  real  estate  loans  may 
be  made  have  established  machinery  and  facilities  for 
making  loans.  They  have  the  necessary  knowledge  of 
local  conditions  and  personalities.  Self-interest  will  pre- 
vent them  from  making  excessive  or  risky  loans,  and  they 
can  probably  do  this  business  at  less  expense  than  that 
with  which  the  Postal  Bank  could  itself  organize  and 
conduct  a  safe  loan  board.  If  they  are  compelled  to  fore- 
close, they  will  be  entitled  to  such  costs  and  fees  as  the 
courts  allow. 

The  commission  in  the  great  cities  allowed  agents  for 


34  PEACE  AND  PROSPERITY  VIA 

collecting  rents  is  from  1  to  5  per  cent  of  the  rent — 
commonly  2  per  cent  for  large  buildings.  The  monthly 
collection  of  rents  is  certainly  more  onerous  and  expen- 
sive than  the  collection  of  interest  on  mortgages  once  or 
twice  a  year.  Interest  is  the  rent  of  money.  The  com- 
mission runs  during  the  life  of  the  loan  and  is  payable 
annually. 

Let  us  illustrate.  A  bank  with  $100,000  of  capital  will 
first  loan  its  own  funds  to  such  extent  as  it  pleases,  under 
legal  limits ;  then  it  may  loan  for  the  Postal  Bank  to  any 
amount  not  exceeding  $1,000,000.  Interest  on  loans  of 
$1,000,000  at  5  per  cent  is  $50,000  a  year ;  5  per  cent  com- 
mission on  such  interest  is  $2,500  a  year.  Thus  its  loans 
for  the  Postal  Bank  produce  a  perpetual  income  of  $2,500 
a  year,  with  trifling,  if  any,  additional  rent  or  clerk  hire. 
How  many  times,  under  present  conditions,  are  the  banks 
compelled  to  quit  lending  because  of  lack  of  loanable 
funds?  Here  there  will  never  be  such  lack. 

Note  further  that  this  commission  of  5  per  cent  is 
double  that  allowed  for  dealings  on  the  New  York  Stock 
Exchange,  and  still  further  that  it  is  annually  renewed 
during  the  life  of  the  loan,  instead  of  being  paid  but  once, 
as  on  the  New  York  Stock  Exchange. 

"Sec.  11.  Personal  loans  without  requirement  of  col- 
lateral security  by  the  Postal  Savings  Bank  may  be  made 
in  manner  as  follows: 

(a)  The  borrower  to  make  written  statement  showing 
his  assets  and  liabilities ;  the  amount  of  loan  not  to  exceed 
$1,000;  the  length  of  time,  which  shall  not  exceed  one 
year ;  the  purpose  for  which  the  loan  is  to  be  used,  which 
shall  be  in  accordance  with  the  stated  purpose  of  this  act; 
which  statement  shall  be  attached  to  the  borrower's  ne- 
gotiable note. 

(b)  The  principal  and  interest  of  the  loan  to  be  guar- 
anteed prompt  payment  by  a  bank  or  corporation,  as  in 


JUSTICE  AND  PRACTICAL  SENSE          35 

Section  10  of  this  act,  which  shall  be  entitled  to  a  com- 
mission of  5  per  cent  of  the  interest  paid  thereon,  or  less, 
as  the  board  may  direct,  the  borrower  being  subject  to 
no  other  charge,  and  the  total  of  such  loans  at  one  time 
outstanding  not  to  exceed  five  times  the  capital  and  sur- 
plus of  the  guarantor. 

(c)  The  limit  of  the  loans  specified  in  (a)  of  this  sec- 
tion, if  after  two  years'  trial  is  deemed  too  small  for  the 
best  results,  may  be  extended  by  the  board  from  time  to 
time  to  larger  specified  sums,  the  terms  to  be  uniform 
throughout  the  United  States." 

These  personal  loans  are  to  be  made  without  collateral 
through  the  banks,  other  financial  institutions,  and  so 
forth,  which  guarantee  principal  and  interest,  for  an  an- 
nual commission  of  5  per  cent  on  the  interest.  The  bank 
through  which  the  loan  is  made  may  exact  what  security 
it  pleases. 

These  personal  loans  should  amply  meet  the  wants  of 
small  farmers,  mechanics  and  even  merchants,  for  short- 
time  loans  to  provide  for  planting  and  marketing  crops, 
or  other  temporary  needs. 

Here  is  the  possibility  of  $1,250  additional  income  a 
year  for  the  bank  with  $100,000  capital.  Remember  that 
the  bank  has  the  opportunity  first  to  utilize  its  own  capi- 
tal on  the  "pick"  of  the  loans.  So  we  have  an  annual 
profit  for  the  bank  in  question  of  $3,750  for  handling  the 
funds  of  the  Postal  Bank,  the  borrower  getting  his  funds 
at  5  per  cent  or  less.  Now  observe  further,  that  this 
profit  may  be  doubled  by  the  commission  received  by  the 
bank  on  the  deposits  it  receives  and  maintains  for  the 
Postal  Bank  under  Section  20. 

As  agents  for  the  loan  of  Postal  Bank  funds  there 
will  be  legitimate  profit  for  commercial  banks  of  prob- 
ably $100,000,000  a  year  in  return  for  honorable,  highly 
useful  economic  service. 

If  the  Postal  Bank  can  earn  its  depositors  4  per  cent, 


36  PEACE  AND  PROSPERITY  VIA 

commercial  banks,  with  greater  initiative,  and  warrant 
to  take  risks,  which  the  Postal  will  not  take,  can  earn 
their  depositors  even  more — and  they  can  always  serve 
the  worlds  of  commerce  and  manufacture  as  the  Postal 
Bank  can  never  do. 

Nothing  is  more  profitable — economically  profitable — 
than  simple,  even-handed  justice,  which  is  here  proposed 
for  depositors  and  patrons  of  the  Postal  Savings  Bank, 
and  for  the  benefit  of  the  nation  in  times  of  war  or  of 
peace. 

"Sec.  12.  To  induce  the  largest  possible  savings  and 
serve  the  greatest  possible  convenience,  security  and 
economy  of  use  to  depositors  and  to  the  Postal  Savings 
Bank,  the  Industrial  Savings  Board  shall  cause  to  be  pre- 
pared and  issued  certificates  of  deposit  of  the  size  and 
form,  but  different  in  color  and  appearance,  of  customary 
bank  currency,  the  said  certificates  being  of  the  following 
tenor  and  in  manner  indicated: 

(a)  Issued  (year?)  —  January,  February,  March, 
April,  May,  June,  July,  August,  September,  October, 
November,  December. 

Day— 1,  2,  3,  4,  5,  6,  7,  8,  9,  10,  11,  12,  13,  14,  15,  16, 
17,  18,  19,  20,  21,  22,  23,  24,  25,  26,  27,  28,  29,  30,  31. 

The  United  States  Postal  Savings  Bank  has  received 
from  (here  the  depositor  will  write  his  signature  or  not, 
as  he  pleases,  thus  identifying  his  signature  on  the  back 
when  he  passes  the  same)  $10  (or  other  specified  sum) 
and  will  pay  the  same,  together  with  all  net  interest 
earned  hereon,  the  interest  compounded  semi-annually, 
on  surrender  hereof  properly  indorsed.  If  no  signature 
is  written,  payment  shall  be  to  bearer.  Interest  shall  be- 
gin on  the  first  day  of  the  month  indicated  by  cancella- 
tions in  the  margin,  and  shall  terminate  the  last  day  of 
the  month  preceding  payment,  also  shall  terminate  five 
years  after  date  of  issue,  but  any  certificate  may  at  any 


JUSTICE  AND  PRACTICAL  SENSE         37 

time  be  surrendered  in  exchange  for  a  new  issue  of 
current  date. 

Issued  and  payable  at  Washington,  D.C.,  but  pro- 
curable or  cashable  through  any  post  office  or  authorized 
bank. 

(b)  Certificates  in  this  form  shall  be  issued  in  denomi- 
nations of  $1,  $2,  $5,  $10,  $50,  $100,  $1,000,  and  larger, 
as  the  Industrial  Savings  Board  may  order. 

(c)  Certificates  similar,  but  bearing  no  interest,  shall 
be  issued  in  denominations  of  $1,  $2,  and  $5  and  $10. 

(d)  To  encourage  the  beginning  of  deposits,  and  also 
serve  the  convenience  of  those  who  desire  them  in  pref- 
erence to  coin  money,  certificates  payable  to  bearer,  with- 
out interest,  shall  also  be  issued  in  denominations  of  5 
cents,  10  cents,  25  cents,  and  50  cents,  of  size  and  form 
similar  to  United  States  fractional  currency  issued  in 
1862  and  later. 

(e)  An  additional  form  of  Certificate  of  Deposit  of 
similar  purport  to  (a)  shall  be  a  Registered  Certificate, 
issued  in  multiples  of  $100,  the  principal  payable  at  any 
time  on  surrender,  properly  indorsed,  the  interest  to  be 
remitted  semi-annually,  all  details,  including  manner  of 
registration,  being  according  to  regulations  of  the  Indus- 
trial Savings  Board. 

(/)  Simple  printed  instructions  for  their  use  may  ap- 
pear on  the  front  or  back  of  each  of  the  various  certifi- 
cates. 

(g)  These  certificates  shall  not  be  legal  tender  nor  in 
any  way  indicated  as  "money/'  but  may  pass  from  hand 
to  hand  by  mutual  agreement  as  is  done  in  the  case  of 
"certified"  or  other  bank  checks. 

(h)  Checking  accounts  may  also  be  permitted  by  de- 
positors who  carry  an  average  balance  over  $500,  at 
cities  designated  and  in  accordance  with  regulations  made 


38  PEACE  AND  PROSPERITY  VIA 

by  Industrial  Savings  Board,  interest  on  daily  balances 
to  be  paid  on  such  accounts  semi-annually." 

You  give  the  Postal  Bank  $10  in  gold,  or  what  will 
get  the  gold,  and  you  prefer  this  certificate  to  gold  be- 
cause this  earns  compound  interest.  Printed  tables  will 
tell  you  its  value  at  4  per  cent  or  other  interest  for 
any  number  of  days,  months,  or  years.  The  bank  loans 
your  gold,  "on  call,"  on  security  of  municipal  bonds,  at 
4  per  cent ;  or  on  wheat  or  cotton  for  a  month  or  a  year 
at  5  per  cent;  or  on  farm  mortgage,  5  years,  at  5  per 
cent,  to  the  highest  bidder  in  each  case.  Whoever  gets 
the  gold,  of  course,  deposits  it  again  in  the  Postal  Bank 
and  takes  a  certificate  like  yours,  and  the  bank  of  course 
loans  the  gold  again,  and  so  on,  perhaps  ten  times  over, 
so  that  $10  gold  is  earning  possibly  50  per  cent  per  an- 
num, and  the  Postal  Bank  still  has  that  gold  to  loan  to 
the  next  man!  This  shows  how  banks  have  got  rich  in 
the  past ;  how  depositors  will  hereafter  get,  not  rich,  but 
each  what  his  money  fairly  earns.  Nobody  wants  to  keep 
that  gold  any  more  than  you  want  the  man's  yardstick 
when  you  buy  10  yards  of  muslin.  If  you  get  certificates 
of  deposit,  drawing  no  interest  on  their  face,  the  bank 
loans  the  gold,  just  the  same,  and  so  earns  increased  in- 
terest on  your  $10,  $100  and  $1,000  certificates. 

This  "automatic  money  mobilizer"  does  away  with  all 
necessity  for  the  clumsy,  antiquated  "individual  ac- 
counts" bookkeeping  methods,  and  will  reduce  bank  ex- 
penses in  that  respect  to  one-fourth  or  one-tenth  of 
present  cost  and  be  far  more  convenient  for  depositors, 
and  just  as  safe  as  present  clumsy  method. 

Instead  of  clipping  coupons  twice  a  year  as  in  U.  S. 
bonds,  the  depositor  simply  pays  out  part  of  his  hold- 
ings, those  he  retains  growing  in  compound-interest 
value. 

These  certificates  of  deposit,  each  virtually  a  "certified 
check"  (certified  by  Uncle  Sam)  will  be  good  anywhere 
in  the  U.  S.  just  as  gold  certificates  are  good  anywhere, 


JUSTICE  AND  PRACTICAL  SENSE          39 

though  the  gold  is  in  the  U.  S.  Treasury  vaults.  Thus 
they  will  serve  "for  exchange"  and  tend  to  do  away  with 
the  present  cumbersome  and  vastly  expensive  "exchange" 
system. 

Postal  Banks  will  almost  never  pay  out  real  "money" 
at  all,  but  pay  out,  instead,  because  preferred,  only  its 
own  certificates  of  deposit,  which  serve  every  possible 
purpose  of  real  money,  and  every  dollar  of  which  earns 
interest  for  depositors  every  day  it  is  outstanding. 

These  certificates  will  make  the  money  in  your  pockets, 
cash  drawer,  or  safe,  draw  interest  for  you  while  you 
hold  them,  for  the  next  man  when  you  pay  them  over — 
will  buy  anything  which  gold  will  buy — will  buy  gold 
itself.  Nobody,  but  bankers  (as  basis  for  larger  credits, 
and  for  foreign  exchange)  wants  gold,  which  in  posses- 
sion earns  no  interest,  but  will  prefer  these  certificates 
which  in  possession  do  earn  compound  interest. 

Everybody,  even  pro-Germans  and  pacifists,  will  gladly 
turn  over  to  the  Postal  Bank,  in  exchange  for  these  cer- 
tificates, every  dollar  he  has,  every  dollar  he  gets  in  the 
future,  that  it  may  earn  him  4  per  cent  or  other  interest — 
all  will  "flock"  to  deposit  earnings  in  the  Postal  Bank 
as  hungry  men  coming  to  a  feast  (no  need  for  "Barnum 
circus"  advertising  methods,  semi-hysterical,  undignified 
appeals  to  patriotism  to  buy  "Liberty  Bonds,"  buy  "War 
Savings  Stamps")  which  by  approval  of  all  Postal  Bank 
depositors  will  have  preference  to  the  extent  of  Uncle 
Sam's  need  for  Postal  Bank  investments. 

Every  banker  knows,  as  do  most  of  the  well-informed, 
that  of  all  the  so-called  "money"  in  existence,  nearly 
one-half  of  it  is  not  at  one  time  in  any  bank.  Some  of 
it  is  foolishly  "hoarded"  by  those  "afraid  of  banks,"  but 
most  of  it  is  just  "idle  money,"  in  your  pocket  and  mine, 
earning  nothing,  "no  good"  at  all  till  we  pay  it  out  for 
something  we  want.  Ever  since  banks  were  invented 
bankers  have  been  trying  to  "corral"  this  elusive  outside 
money,  "going  to  waste"  just  as  much  as  water  running 


40  PEACE  AND  PROSPERITY  VIA 

over  the  dam  instead  of  through  the  turbine  is  wasted 
(dam  foolishness?).  This  simple  device  of  a  negotiable 
Postal  Bank  certificate  of  deposit  will  naturally  and 
certainly  as  the  law  of  gravitation,  as  the  law  of  mag- 
netism draws  bits  of  iron,  "chase"  this  "money"  out  of 
your  pocket  and  mine,  even  out  of  knot-holes,  stockings, 
tin  cans  and  other  hiding  places,  into  existing  banks,  ap- 
proximately doubling  the  foundation  resources  of  banks. 
There  it  will  be  loaned,  redeposited  and  loaned  again,  in 
a  way  bankers  know  how,  till  the  near  two  and  a  half 
billion  dollars  of  now  "idle  money"  is  multiplied  to 
thirty  or  more  billions  of  available  useful  "credits" 
— perfectly  good,  not  so  much  because  always  "pay- 
able in  gold,"  as  because  based  on  solid  property 
assets,  earning  or  growing  into  money  or  what  brings 
money.  This  will  practically  nearly  "double  the  money 
crop,"  and  as  doubling  the  crop  of  wheat,  or  cotton  tends 
to  "cut  the  price,"  so  should  this  tend  to  reduce  interest 
(the  "price"  of  money)  to  Uncle  Sam,  when  he  wants 
to  borrow  money  to  fight  with,  or  to  you  and  me  if  we 
want  to  borrow  to  build  a  silo,  buy  a  farm  tractor,  or 
build  a  home. 

Obviously  a  feature  of  infinite  value  incidental  to  this 
plan  is  its  incitement  to  thrift  and  saving — universal, 
far-reaching. 

The  present  gold  basis  of  all  money  will  in  no  way  be 
altered.  Of  course,  actual  gold  will  be  called  for  only 
as  limited  commercial  exigencies  compel  its  use,  because 
gold  in  possession  earns  no  interest,  while  certificates  of 
deposit  in  the  Postal  Bank  in  possession  earn  compound 
interest. 

Take  emphatic  note  that  nothing  is  here  suggested  in 
the  line  of  "fiat  money"  nor  even  of  "inflation"  of  cred- 
its. 

Every  bit  of  paper  is  to  be  on  "a  parity  with  gold" — 
certificates  of  deposit  are  made  so  good  they  are  to  be 
preferred  to  gold. 


JUSTICE  AND  PRACTICAL  SENSE          41 

The  essence  of  "inflation''  that  is  vicious,  is  so-called 
"money"  not  based  on  reality,  or  credits  not  based  on 
solid  security,  but  on  "speculative"  values,  rather  than 
on  the  earning,  creating  power  in  the  investment  made. 

Here  is  proposed  only  ("inflated"?)  credit  to  Uncle 
Sam,  based  on  his  power  of  taxation  of  over  100  mil- 
lions of  patriotic,  money-earning,  wealth-creating  Ameri- 
cans— and  loans  to  such  "creators"  of  wealth  only  as  are 
wanted  for  legitimate  use  and  to  borrowers  who  are  able 
adequately  to  secure  the  loan — by,  for  instance,  the 
pledge  of  Liberty  Bonds,  or  of  wheat,  or  cotton,  or 
farms,  or  other  things  that  are  safely,  on  the  average, 
fire,  flood,  and  earthquake  proof. 

"Sec.  13.  The  Secretary  of  the  Treasury  is  authorized 
hereafter  to  deposit  any  money  in  the  Treasury,  in  the 
Postal  Savings  Bank  (without  requiring  security  there- 
for) as  he  does  in  other  banks  of  deposit,  and  shall,  so 
far  as  practicable  to  do  so,  make  disbursements  from  the 
Treasury  in  the  form  of  certificates  of  deposit  in  the 
Postal  Savings  Bank." 

"No  security"  is  required  for  deposits  of  Treasury 
funds,  because  in  the  Postal  Bank  they  are  in  the  cus- 
tody of  the  Government  the  same  as  when  in  the  Treas- 
ury itself. 

Thus  the  U.  S.  Treasurer  need  not  (but  may  do  so) 
any  more  offer  bonds  for  sale,  but  can  simply  issue  them 
to  the  Postal  Bank  in  exchange  for  certificates  of  de- 
posit which  he  will  pay  out — the  workman  will  prefer 
them  to  money  for  wages,  the  farmer  for  grain  or  stock, 
the  mine  owner  for  coal,  and  so  on. 

The  U.  S.  Treasury  may  continue  to  deal  with  com- 
mercial banks  the  same  as  now,  but  with  the  Postal  Bank 
also. 

"Sec.  14.  All  banks  in  the  U.  S.  may  hereafter  de- 
posit their  funds  in  the  Postal  Savings  Bank,  and  certi- 


42  PEACE  AND  PROSPERITY  VIA 

cates  of  deposit  issued  therefor  may  be  counted  as  part 
of  their  legal  reserve." 

Of  course  banks  may  continue  so  far  as  they  desire 
to  carry  gold  and  other  "reserves,"  and  those  having 
foreign  relations,  especially,  may  naturally  do  so  to  an 
extent,  but  these  certificates  of  deposit  represent  such 
assets  in  the  Postal  Bank,  and  therefore  serve  the  same 
end,  and  they  earn  interest  for  the  depositing  bank,  while 
the  gold  they  carry  in  reserve  earns  nothing. 

Thus  the  Postal  Savings  Bank  becomes  a  gigantic 
"ally"  rather  than  competitor  of  existing  savings  and 
commercial  banks — becomes  one  vast  "reservoir"  (not 
many  thousand  separate,  competing  banks)  into  which 
everybody,  other  banks  included,  pour  deposits,  and 
draw  them  out  again,  with  interest,  as  wanted. 

"Sec.  15.  That  at  the  county  seat  of  every  county  in 
the  United  States,  or  similar  civil  divisions  otherwise 
called,  and  in,  such  other  cities  as  the  Industrial  Savings 
Board  may  specify,  post  offices  shall  be  designated  as 
Postal  Savings  Banks  of  Issue  and  Redemption. 

(a)  Such  banks  of  issue  and  redemption  shall  issue 
and  record  as  required  by  the  Industrial  Savings  Board 
certificates  of  deposit  as  described  in  Section  12  hereof, 
in  exchange  for  bankable  funds  as  per  regulations  made 
by  said  board,  and  may  redeem  the  same,  whether  issued 
by  itself  or  by  other  similar  banks  of  issue  and  redemp- 
tion, either  in  money  or  in  new  certificates  of  deposit, 
as  the  applicant  may  desire. 

(b)  Each  depositor  in  said  banks  shall  record  his  sig- 
nature and  address  in  duplicate  with  the  bank  on  a  rec- 
ord provided,  as  is  customary  in  commercial  banks,  so 
that  indorsements  of  signatures  on  backs  of  certificates 
may  be  verified  when  desired. 

(c)  These  banks  of  issue  and  redemption  shall  supply 
minor  post  offices  in  their  region,  and  letter  carriers,  with 


JUSTICE  AND  PRACTICAL  SENSE          43 

facilities  for  serving  all  who  desire  to  do  business  with 
the  Postal  Savings  Bank,  requiring  such  security  as  may 
be  necessary  from  those  handling  the  funds  of  the  bank 
or  its  patrons. 

"Sec.  16.  The  Industrial  Savings  Board  shall  desig- 
nate 12  or  more  districts  covering  the  United  States,  in 
a  central  city  of  each  of  which  it  shall  cause  to  be  organ- 
ized a  district  bank  which  shall  act  as  clearing  and  re- 
serve bank  for  all  the  banks  of  issue  and  redemption 
within  the  district,  in  accordance  with  rules  and  regula- 
tions of  the  Industrial  Savings  Board. 

"Sec.  17.  The  Industrial  Savings  Board  shall  further 
cause  to  be  organized  in  the  city  of  Washington,  D.  C., 
in  the  Post  Office  Department,  a  national  central  Postal 
Savings  Bank,  which  shall  act  as  clearing  and  reserve 
bank  for  the  12  district  banks,  and  may  have  direct  deal- 
ings with  and  oversight  of  all  tha  county  banks  of  issue 
and  redemption  as  the  Industrial  Savings  Board  shall 
order. 

"Sec.  18.  Every  smaller  post  office  and  every  letter 
carrier  may,  in  accordance  with  regulations  made  by  the 
Industrial  Savings  Board  (adequate  bonds  for  safety  be- 
ing required),  as  convenient,  keep  in  hand  limited 
amounts  of  certificates  of  deposit,  secured  from  the  local 
county  banks  of  issue  and  redemption,  to  be  given  to 
known  applicants  in  exchange  for  bankable  funds  to  be 
forwarded  to  the  county  bank  of  issue  and  redemption, 
and  may  also  redeem  small  certificates  of  deposit  as  can 
conveniently  be  done.  Such  post  offices  and  letter  carriers 
shall  also  give  proper  receipts,  to  applicants,  for  bank- 
able funds  or  for  certificates  of  deposit,  to  be  sent  to 
the  county  bank  of  issue  and  redemption  to  be  exchanged 
for  money  or  other  certificates  of  deposit,  and  deliver 
the  same  to  said  applicant  in  exchange  for  their  own  re- 
ceipt originally  given  to  the  applicant. 


44  PEACE  AND  PROSPERITY  VIA 

"Sec.  19.  Each  county  bank  of  issue  and  redemption 
and  each  district  bank  shall  keep  in  hand  such  working 
balance  as  the  Industrial  Savings  Board  shall  direct,  the 
county  bank  forwarding  any  surplus  to  its  district  bank, 
and  the  district  bank  any  surplus  to  the  national  central 
bank,  and  each  of  said  banks  shall  make  loans  as  author- 
ized by  the  Industrial  Savings  Board,  the  county  bank 
drawing  for  funds  when  necessary  on  its  district  bank 
and  the  district  bank  drawing  on  the  national  central 
bank,  as  the  Industrial  Savings  Board  may  direct." 

Briefly,  these  sections  provide  that  Postal  Banks  shall 
be  established  in  every  county  seat,  other  post  offices  in 
the  county  to  be  branches  of  tke  county-seat  bank,  under 
regulations  of  the  board.  The  United  States  is  to  be 
divided  into  12  or  more  districts,  with  a  central  Postal 
Bank  for  each  district,  which  shall  act  as  a  clearing  and 
reserve  bank  for  the  banks  in  the  district  and  which  may 
have  supervision  over  the  county  banks. 

"Sec.  20.  Existing  savings  and  other  banks  in  the 
•United  States  which  desire  and  will  submit  to  satisfac- 
tory examination  and  supervision  of  the  Industrial  Sav- 
ings Board  and  are  found  of  standing  satisfactory  to 
the  board,  may  be  made  agents  of  the  Postal  Savings 
Bank,  to  receive  deposits  and  pay  certificates  in  accord- 
ance with  regulations  made  by  the  board,  and  shall  be 
allowed  as  compensation  for  such  service  a  commission 
to  be  authorized  by  the  board  and  not  to  exceed  5  per 
cent  of  the  net  earnings  of  the  deposits,  for  which  regis- 
tered certificates  (only)  are  issued,  which  said  existing 
bank  secures  through  its  agency,  such  commissions  to  be 
uniform  throughout  the  United  States." 

The  provisions  of  this  and  other  sections  permitting 
any  bank  in  the  United  States  in  good  standing  to  be- 
come a  deposit  and  loan  agent  of  the  Postal  Bank  would 
tend  to  strengthen  rather  than  to  injure  by  competition 


JUSTICE  AND  PRACTICAL  SENSE         45 

any  and  every  such  bank.  Their  depositors  would  not 
leave  them  for  the  postal,  because  they  can  supply  the 
postal  certificates  when  preferred  to  their  own.  As  pri- 
vate enterprise  and  initiative  have  certain  advantages 
over  public  institutions,  due  to  more  accurate  knowledge 
of  local  conditions  and  opportunities  and  better  means 
of  keeping  in  touch  with  them,  the  agents  by  offering 
slight  additional  interest  inducement  may  secure  en- 
larged deposits  for  themselves.  To  applicants  for  loans 
the  agent  may  always  loan  his  own  funds  instead  of 
loaning  the  postal  funds  if  he  desires. 

Note  the  profit  to  existing  banks  in  this  connection, 
illustrated  in  note  under  Section  11.  Commissions  for 
deposits  are  allowed  only  on  those  for  which  registered 
certificates  of  deposit  are  issued,  as  it  would  be  too  com- 
plicated and  difficult  to  keep  accounts  in  connection  with 
other  deposit  certificates.  It  is  believed  depositors  gen- 
erally will  prefer  the  registered  certificates  for  all  larger 
and  long  standing  balances,  and  agent  banks  will  of 
course  work  particularly  to  secure  such  deposits. 

"Sec.  21.  In  lieu  of  the  principle  of  amortization 
(which  may  be  applied  when  the  borrower  desires)  loans 
secured  by  real  estate  or  other  collateral  may  be  made 
as  follows: 

The  mortgage  or  other  paper  shall  be  drawn  to  secure 
any  sum  due  from  the  borrower  not  exceeding  the 
amount  named  therein  for  any  time  not  longer  than  the 
longest  time  therein  specified,  the  borrower  thus  being 
permitted  to  adjust  the  amount  of  his  loan  from  time  to 
time  according  to  his  needs  and  opportunities/' 

Under  this  plan,  while  the  borrower  would  naturally 
make  application  for  the  largest  loan  which  the  pledged 
property  would  be  sufficient  to  secure,  his  certificate 
being  passed,  he  would  actually  borrow  not  the  most,  but 
the  least,  sum  that  would  serve  him,  and  borrow  only  as 


46  PEACE  AND  PROSPERITY  VIA 

it  was  actually  needed,  and  would  repay  it  as  fast  as  he 
could,  so  as  to  stop  interest,  knowing  that  he  could  at 
any  time  borrow  again  if  he  should  have  need  or  find 
profitable  use  for  the  money.  This  elasticity  of  loans 
would  be  of  almost  incalculable  value  to  the  borrowers, 
to  the  bank,  and  to  the  community,  stimulating  enter- 
prise, thrift,  economy,  providence,  and  would  certainly 
be  more  desirable  than  iron-clad,  unalterable  amortiza- 
tion loans. 

"Sec.  22.  The  Industrial  Savings  Board  shall  test  the 
safety  and  practicability  of  making  small  and  short-time 
loans  to  farmers  and  other  producers  in  manner  as  fol- 
lows, and  in  accordance  with  such  other  regulations  as 
may  be  specified  by  the  board: 

(a)  After  the  total  balance  of  deposits  in  the  Postal 
Savings  Bank  shall  have  reached  the  sum  of  not  less 
than  $1,000,000,000. 

(b)  The  board  shall  select  not  to  exceed  10  counties  in 
various  parts  of  the  United  States  to  make  trial  for  a 
period  of  not  less  than  one  year,  after  which  time,  if  in 
the  opinion  of   the  board  the  plan   is   successful,   the 
method  may  be  extended  to  many  or  all  other  counties. 

(c)  All  persons  desiring  to  borrow,  without  collateral 
security,  any  sum  not  to  exceed  $500  for  a  time  not  to 
exceed  one  year,  each  shall  make  a  statement  showing 
the  amount  of  his  assets  and  liabilities  with  their  nature, 
in  form  and  manner  specified  by  the  board,  the  amount 
of  the  loan  desired,  its  length  of  time,  and  the  purpose 
for  which  it  is  to  be  used,  in  accordance  with  this  act, 
which  statement  shall  be  attached  to  the  applicant's  ne- 
gotiable note. 

(d)  These  applications  shall  be  referred  for  approval 
or  rejection  to  a  committee  of  three  persons  elected  by 
the  applicants  for  such  loans  within  the  county  and  also 
to  a  committee  of  three  persons  elected  by  the  deposi- 


JUSTICE  AND  PRACTICAL  SENSE         47 

tors  in  the  Postal  Savings  Bank  within  the  county  hold- 
ing registered  certificates  in  manner  provided  here  fol- 
lowing: Loans  to  be  allowed  must  be  approved  by  not 
less  than  two-thirds  of  the  weight  of  vote  of  each  com- 
mittee and  also  approved  by  one  or  more  experts  ap- 
pointed by  the  Industrial  Savings  Board. 

(e)  The  two  said  committees  to  be  elected  in  manner 
as  follows:  The  postmaster  to  prepare  printed  ballots 
and  send  the  same  with  return  envelope  to  himself  and 
send  to  each  applicant  for  loan,  and  to  each  depositor  in 
the  county  bank  of  issue  and  redemption  having  then, 
and  three  months  previously,  outstanding  registered  cer- 
tificates of  deposit.  Each  such  elector,  applicant,  or  de- 
positor, shall  be  entitled  to  three  votes,  which  he  may 
cast  for  three,  two,  or  one  person  of  his  choice.  The 
persons  so  chosen,  each  having  weight  of  vote  according 
to  the  number  of  vote  by  which  he  is  chosen,  shall  upon 
notice  of  the  postmaster  meet  and  choose  three  of  their 
number  to  act  as  the  committee,  such  electors  balloting 
repeatedly  as  may  be  necessary  to  reduce  the  number  to 
three.  The  committee  thus  elected,  each  member  shall 
have  weight  of  vote  according  to  the  cumulative  number 
of  votes  by  which  he  is  chosen. 

(/)  The  members  of  the  committee  chosen  shall  have 
compensation  for  services  in  passing  on  loans  at  the  rate 
of  20  cents  an  hour,  the  time  to  be  approved  by  the 
county  seat  postmaster. 

(g)  Applicants  whose  loans  are  accepted  shall  give 
the  bank  negotiable  notes  for  the  amounts  and  time 
approved,  the  same  to  be  discounted  by  the  bank  at  10 
per  cent  per  annum,  the  applicant  being  given  the  pro- 
ceeds less  his  pro  rata  of  all  expense  of  passing  on  the 
loans.  After  the  end  of  one  year,  when  all  of  the  loans 
shall  have  matured,  any  profits  to  the  bank  on  the  total 
of  the  loans  in  excess  of  5  per  cent  per  annum  shall  be 
paid  as  provided  by  the  board  in  rebate  to  those  \\ho.~e 


48  PEACE  AND  PROSPERITY  VIA 

loans  shall  have  been  promptly  and  fully  paid,  so  that  the 
net  cost  of  the  loan  to  the  borrower  may  possibly  be  re- 
duced to  approximately  the  same  as  the  interest  rate  on 
secured  loans. 

(h)  If  after  ample  test  such  method  of  loaning  is 
found  safe  and  profitable,  the  amount  to  be  loaned  to 
each  applicant  may,  by  rule  of  the  Industrial  Savings 
Board,  be  increased  beyond  $500,  the  increase  to  be  uni- 
form throughout  the  United  States,  and  not  to  exceed 
$1,000.  If  some  counties  prove  to  be  habitually  un- 
profitable, while  other  counties  prove  to  be  habitually 
profitable,  the  board  may  withhold,  temporarily,  or 
longer,  permission  to  make  such  loans  from  the  unprof- 
itable counties." 

This  section,  as  it  specifies,  is  intended  to  be  tentative 
and  experimental.  It  is  believed  that  generally  through- 
out the  United  States  practically  all  deserving  wants  of 
borrowers  will  be  amply  taken  care  of  under  Sections 
10  and  11.  But  the  possibility  of  use  being  made  of  this 
section  will  have  a  healthy  influence  on  banks  acting  as 
loan  agents  under  said  sections,  and  this  plan  of  passing 
on  loans,  the  depositors  approving  or  rejecting,  the  bor- 
rowers assuming  limited  mutual  responsibility,  may  in 
time  be  extended  to  real  estate  and  other  secured  loans. 

"Sec.  23.  Commercial  and  savings  banks  may  make 
deposits  in  and  draw  upon  county  banks  of  issue 
and  redemption  to  such  extent  as  said  county  banks  may 
be  able  conveniently  to  serve  them,  but  may,  without 
limitation,  deal  direct  with  the  district  banks  and  na- 
tional central  bank  as  per  regulations  of  Industrial  Sav- 
ings Board,  and  certificates  of  deposit  in  the  Postal  Sav- 
ings Bank  may  be  counted  as  part  of  the  legal  reserve 
of  all  depositing  banks." 

If  any  bank  should  prefer  to  keep  gold  or  other  form 


JUSTICE  AND  PRACTICAL  SENSE          49 

of  so-called  money  as  a  reserve,  it  can  do  so;  if  such 
other  form  of  reserve  than  certificates  of  the  Postal 
Bank  makes  it  any  stronger,  then  it  will  have  what  ad- 
vantage there  may  be  in  the  increased  strength. 

Certificates  of  deposit  in  the  Postal  Bank  are  not 
legal  tender  but  each  is  a  certified  check,  certified  by  the 
United  States  Government,  and  is  good  anywhere.  Cer- 
tified checks  of  banks  are  not  legal  tender,  but  do  they 
not  serve  amply  every  commercial  want  except  in  rare 
technical  legal  quibbles?  If  what  is  offered  is  good — 
as  gold  is  recognized  as  good  even  when  not  coined — it 
does  not  need  to  be  legal  tender.  If  it  is  not  good — 
accepted  by  custom — it  is  at  best  a  promise  and  com- 
monly in  some  measure  a  deception,  and  in  the  end  the 
man  who  labors  is  the  man  who  loses  most  by  the  fraud. 
Of  course,  the  law  of  inviolability  of  contract  will  con- 
tinue, and  the  debtor  must  always  make  good  according 
to  his  contract,  whether  it  is  formal  or  by  implication. 
Postal  Bank  deposits  will  always  be  good  while  the 
United  States  Government  is  good.  These  certificates 
legitimately  meet  the  popular  demand  for  "guaranteed 
bank  deposits,"  because  "Uncle  Sam"  is  custodian  of  the 
deposits,  as  he  is  for  money-order  funds. 

"Sec.  24.  The  board  shall  cause  to  be  prepared  and 
printed  for  the  general  public  simple  tables  showing  the 
value  of  $10  or  other  sums  at  compounded  interest  for 
days,  months,  and  years  at  various  rates  of  interest,  such 
as  will  be  useful  to  depositors." 

This  will  be  a  matter  so  simple  that  any  intelligent 
person  can  know  the  value  of  the  certificates  he  owns. 
What  are  the  net  earnings  of  the  Postal  Bank  will 
quickly  be  known,  will  be  steadily  the  same,  or  only 
slightly  or  gradually  varying  from  month  to  month,  and 
will  be  published  continually  in  papers  and  periodicals. 

Of  course,  it  will  be  the  smaller  certificates,  $10  and 


50  PEACE  AND  PROSPERITY  VIA 

less,  which  do  not  on  their  face  bear  interest  and  are  al- 
ways worth  par,  which  will  mainly  pass  from  hand  to 
hand.  Larger  interest  bearing  certificates  will  pass  prin- 
cipally in  the  same  manner  as  the  ownership  of  United 
States  bonds  passes,  the  market  value  of  which  is  known 
every  day. 

"Sec.  25.  Needless  expensive  records  and  statistics 
shall  be  avoided,  but  the  Industrial  Savings  Board  shall 
provide  for  such  as  may  materially  serve  the  interest  of 
depositors  and  enable  the  board  to  annually  report  to 
Congress  such  information  and  recommendations  as  may 
be  of  service  to  Congress." 

"Sec.  26.  To  the  extent  that  the  mails  shall  be  used 
in  facilitating  the  business  of  the  Postal  Savings  Bank, 
either  by  the  bank  itself  or  by  its  patrons,  the  In- 
dustrial Savings  Bank,  shall  provide  special  stamps  for 
free  use  of  the  mails,  keeping  records  so  that  approxi- 
mately the  actual  cost  of  such  postal  service  shall  be  paid 
by  the  Postal  Savings  Bank  to  the  Post  Office  Depart- 
ment." 

These  provisions  are  matters  of  simple  sense  and  jus- 
tice, and  encourage  the  most  liberal  use  of  the  Postal 
Bank.  Such  use  will  be  principally  local,  or  within  the 
county,  and  the  actual  cost  of  postal  service  for  each 
transaction  nearly  infinitesimal ;  but  whatever  the  cost  is 
it  will  be  paid  by  the  bank  at  the  expense  of  the  bene- 
ficiaries, the  depositors,  and  borrowers,  and  not  of  the 
taxpayers  in  general.  This  principle  is  maintained 
throughout  the  Industrial  Savings  Act. 

"Sec.  27.  The  sum  of  $1,000,000  is  hereby  appropri- 
ated for  any  necessary  expense,  in  the  discretion  of  the 
Industrial  Savings  Board,  in  the  rapid  development  of 
the  Postal  Savings  Bank,  the  sum  used  to  be  considered 
only  as  an  advance  and  to  be  repaid  to  the  Treasury,  with 


JUSTICE  AND  PRACTICAL  SENSE          51 

interest  thereon  at  3  per  cent  per  annum  from  the  profits 
of  the  Postal  Savings  Bank,  which  is  to  be  made  self- 
sustaining  without  subsidy  or  other  charge  against  tax- 
payers/' 

"Sec.  28.  All  provisions  of  an  act  to  establish  postal 
savings,  etc.,  approved  June  25,  1919,  and  of  amendments 
thereto  not  inconsistent  with  this  present  act,  shall  con- 
tinue in  force,  and  all  other  provisions  are  hereby  modi- 
fied or  repealed,  as  are  all  other  acts  of  Congress  incon- 
sistent herewith." 

"Sec.  29.  To  the  extent  that  certificates  in  Postal 
Savings  Banks  crowd  out  of  use  forms  of  paper  money 
now  in  use,  causing  the  depreciation  of  the  market  price 
of  bonds  of  the  United  States  used  to  secure  their  circu- 
lation, below  par,  the  Treasurer  of  the  United  States 
shall  purchase  or  redeem  such  bonds  at  par,  issuing,  so 
far  as  may  be  necessary  to  do  so,  other  bonds  of  the 
United  States  bearing  higher  rate  of  interest  and  market- 
able at  or  above  par." 

This  provision  also  is  a  matter  of  simple  justice  to 
bankers  who  have  invested  in  such  bonds  because  of  the 
currency  advantages  they  gave.  The  United  States  re- 
ceived par  for  the  bonds  and  the  consideration  for  the 
use  having  in  part  terminated,  the  Government  should 
pay  par  for  them. 

Never  have  justice,  patriotism,  necessity,  and  business 
sense  united  more  emphatically  than  in  this  Industrial 
Savings  Act.  It  establishes  a  new  and  immense  reservoir 
of  capital  on  which  all  people  and  all  institutions  posses- 
sing requisite  security  may  draw  on  terms  of  exact  equal- 
ity— a  reservoir  from  which  fresh  streams  of  credit  will 
issue  to  expand  and  multiply  the  channels  of  production, 
manufacture  and  distribution.  The  element  of  personal 
rivalry  will  not  be  known.  A  man,  although  he  may 
offer  perfect  security,  will  not  be  told  at  the  Postal  Bank 


52  PEACE  AND  PROSPERITY  VIA 

that  he  can  not  be  accommodated,  because  he  has  not 
been  depositing  there  or  does  not  belong  to  a  certain 
business  clique.  The  fact  that  this  tremendous  volume 
of  credit  is  loanable  at  not  more  than  5  per  cent  will 
bring  down  and  regulate  interest  charges  everywhere. 
It  will  mean  the  economic  independence  of  the  American 
masses.  The  American  people  possess  the  means  of  cre- 
ating this  beneficent  institution.  They  should  demand 
its  immediate  erection. 

Unshackle  the  Postal  Savings  Bank.  Let  the  people's 
bank  serve  the  people. 

SENATOR  SHEPPARD'S  ARGUMENT 

In  the  U.  S.  Senate,  August  14,  1917,  Hon.  Morris 
Sheppard  of  Teaxs  presented  the  "Industrial  Savings 
Act,"  with  the  illustrative  and  explanatory  notes  (both 
here  slightly  revised  and  somewhat  extended)  and  the 
following  introductory  argument: 

"No  step  could  be  more  vital  to  the  successful  conduct 
of  the  war  than  the  conservation  of  the  financial  re- 
sources of  the  nation.  The  nations  engaged  in  the  pres- 
ent world  conflict  are  straining  every  energy  to  obtain 
funds  with  which  to  continue  the  struggle.  The  most 
powerful  aid  yet  rendered  by  the  United  States  to  its 
allies  has  been  in  the  way  of  enormous  loans. 

As  a  part  of  its  war  program  the  United  States  Gov- 
ernment recently  called  on  its  people  for  a  loan  of  $2,000,- 
000,000  at  3^2  per  cent.  Another  loan  is  to  follpw  and 
still  another  as  the  war  goes  on.  To-day  no  one  may  see 
the  end.  Congress  has  already  authorized  the  Govern- 
ment to  negotiate  loans  to  the  extent  of  $7,000,000,000. 
In  addition,  taxes  are  being  imposed  which  reach  into 
the  billions  and  these  are  to  be  followed  by  others  as 
the  necessities  of  the  most  stupendous  war  of  history 
develop.  Furthermore,  the  cost  of  living  has  soared  to 
appalling  heights. 


JUSTICE  AND  PRACTICAL  SENSE         53 

Any  method,  therefore,  by  which  the  financial  re- 
sources of  the  American  people  or  the  American  Gov- 
ernment may  be  husbanded  and  multiplied  will  be  of  infi- 
nite value.  In  fact,  it  will  be  one  of  the  determining 
weapons  of  the  war.  Men  say  that  the  aeroplanes  will 
win  the  day,  but  behind  the  aeroplane  must  be  money. 
Men  say  we  must  have  modern  guns  and  an  ample  sup- 
ply of  munitions  and  other  equipment  of  the  latest  and 
most  effective  type.  Behind  all  these  must  be  money. 
Men  say,  and  say  properly,  that  our  soldiers  must  be 
carefully  equipped  and  properly  fed ;  but  before  this  can 
be  done  money  must  be  had  and  in  quantities  never  be- 
fore realized  by  the  human  mind  in  this  connection. 
Hand  in  hand  with  man  power  goes  dollar  power.  In 
fact,  at  every  stage  in  the  prosecution  of  the  war  a  sup- 
ply *of  funds  is  an  essential  prerequisite. 

Now,  it  is  a  well-recognized  fact  that  the  principal 
form  of  money  to-day,  both  in  war  and  peace,  consists 
in  paper  evidences  of  credit,  based  on  the  confidence  of 
ultimate  payment  in  metallic  money — mainly  gold.  The 
existing  banking  system,  in  mobilizing  metallic  money 
and  in  erecting  thereon  a  tremendous  structure  of  credit, 
has  made  modern  civilization  and  development  possible 
and  is  rendering  a  service  to  the  world  as  indispensable 
as  it  is  valuable.  Efficient  as  it  is,  however,  the  present 
banking  system  in  the  United  States  had  mobilized  only 
about  half  the  actual  money  in  the  United  States  at  the 
opening  of  the  present  war.  Since  the  war  began  about 
$1,000,000,000  in  gold  has  been  driven  to  the  United 
States  to  aid  in  financing  the  enormous  purchases  made 
here  by  other  countries.  Most  of  this  billion  dollars  will 
be  attracted  back  to  these  countries  after  the  close  of  the 
war  by  the  higher  premiums  which  they  will  pay  for  the 
means  of  reconstruction.  This  makes  it  all  the  more 
necesary  that  we  should  mobilize  all  the  actual  money 
in  the  United  States,  or  as  much  of  it  as  possible,  in  or- 
der to  be  the  better  prepared  to  meet  the  strain  on  our 


54  PEACE  AND  PROSPERITY  VIA 

credit  system  which  will  undoubtedly  follow  the  disap- 
pearance of  this  foreign  gold.  Since  it  came  here  our 
credit  system  has  expanded  in  the  usual  proportion.  That 
proportion  is  about  7  cents  of  gold  to  every  dollar  of 
credit.  When  it  goes,  part  of  our  credit  structure  will 
lose,  and  perhaps  suddenly  lose,  its  foundation.  Therein 
lies  danger. 

In  permitting  about  two  billions  of  actual  money  to 
remain  outside  the  banks,  outside  the  channels  of  credit, 
we  are  allowing  a  Niagara  of  power  to  be  wasted. 

How  may  that  money  be  drawn  from  the  hiding  places 
and  made  to  serve  the  country  by  enormously  increasing 
its  credit  facilities  and  its  financial  power?  The  banks 
have  failed  to  get  it,  although  our  American  bankers  and 
financiers  are  among  the  earth's  ablest  and  best.  Evi- 
dently some  other  form  of  banking  must  be  tried,  in  addi- 
tion to,  and  in  connection  with,  that  we  already  have. 
Banking  in  one  sense  is  the  manufacturing  of  credit,  and 
credit  in  the  modern,  practical  sense  means  a  promise  to 
pay,  based  on  metallic  money,  chiefly  gold. 

The  answer  is,  let  the  United  States  become  a  perma- 
nent banker  for  the  American  people.  Unshackle  the 
Postal  Savings  Bank.  Let  the  people's  bank  serve  the 
people. 

Recently  the  United  States  asked  the  people  to  lend 
it  $2,000,000,000  at  3y2  per  cent.  The  response  was  im- 
mediate and  inspiring.  The  people  deposited  that  amount 
at  once  with  the  Government,  because  of  absolute  confi- 
dence in  the  safety  of  the  transaction.  Why  not  keep 
the  Government  depositary  open  permanently  to  the  peo- 
ple? Instead  of  paying  $l/2  per  cent  interest  on  multiplied 
billions  at  stated  periods,  why  not  give  all  the  people,  so 
desiring,  an  opportunity  to  redeposit  the  interest  due 
them,  and  thus  to  a  great  extent  stop  a  drain  on  the 
Treasury  and  on  taxation  that  promises  to  be  tremen- 
dous? Most  of  the  subscribers  to  the  war  loan  will  re- 
deposit  the  interest  in  some  bank,  anyway. 


JUSTICE  AND  PRACTICAL  SENSE         55 

Do  you  say  that  this  is  putting  the  Government  into 
the  banking  business  ?  The  Government  has  already  en- 
tered the  banking  business.  Since  we  established  the 
Postal  Savings  Bank  only  a  few  years  ago,  700,000  de- 
positors have  placed  therein  $125,000,000  (since  grown 
to  over  $140,000,000) .  And  this  has  been  done  in  spite 
of  the  fact  that  these  depositors  get  only  2  per  cent  in- 
terest, while  the  ordinary  private  savings  bank  pays  3  per 
cent,  and  sometimes  more — in  spite  of  the  fact  that  a 
number  of  restrictions  are  thrown  around  the  postal  de- 
posit which  the  private  banks  do  not  impose  at  all — in 
spite  of  the  fact  that  the  Government  redeposits  these 
$125,000,000  in  the  commercial  banks  at  2%  per  cent, 
the  banks  lending  it  to  the  people  at  anywhere  from  6 
to  12  per  cent,  and  at  times  more. 

The  Government  practices  an  enormous  injustice  on 
its  (near)  700,000  depositors.  It  pays  them  only  2  per 
cent  for  what  is  worth  at  least  twice  that  much,  keeping 
in  mind  the  average  interest  rate  on  money.  But  the 
Government  has  demonstrated  two  facts  of  lasting  sig- 
nificance. It  has  shown  that  the  cost  of  mobilizing  money 
through  the  Postal  Bank  is  not  more  than  one- fourth  of 
1  per  cent,  and  it  has  earned  in  this  way  over  $2,000,000 
of  profit  on  the  limited  business  already  done. 

Nearly  half  of  the  population  of  the  State  of  Victoria, 
Australia,  is  represented  by  depositors  in  the  Govern- 
ment savings  bank  of  that  State.  Over  half  of  the  peo- 
ple of  the  State  of  Connecticut  is  represented  by  deposi- 
tors in  the  savings  banks  of  that  State.  It  is  not  un- 
reasonable to  suppose  that  the  same  or  a  greater  ratio 
would  be  maintained  as  to  depositors  in  a  United  States 
Postal  Savings  Bank  offering  3^  to  4^  per  cent  interest. 
This  means  that  the  unshackled  Postal  Savings  Bank  of 
the  United  States  would  have  from  forty-five  to  fifty-five 
million  depositors,  and  with  the  same  ratio  of  deposits 
as  is  maintained  by  the  savings  banks  of  New  York 
City  to  its  population,  the  United  States  Postal  Savings 


56  PEACE  AND  PROSPERITY  VIA 

Bank  would  have  deposits  of  anywhere  from  twenty- 
seven  to  forty  billions  of  dollars.  Incidentally  let  it  be 
remarked  here  that  with  deposits  of  forty  billions  the 
United  States  Postal  Bank  could  have  financed  the  entire 
$7,000,000,000  bond  issue  recently  authorized  by  Con- 
gress by  an  investment  of  less  than  one-fifth  of  its  de- 
posits, an  operation  that  would  have  been  considered 
entirely  safe  and  conservative  under  the  strictest  stand- 
ards. At  the  same  time  the  Government  would  be  earn- 
ing the  interest  due  the  people  with  the  money  they  had 
deposited,  and  would  be  paying  them  a  higher  return  than 
they  must  now  pay  by  onerous  taxation.  What  kind  of 
business  judgment  is  it  that  prevents  us  from  taking  a 
step  so  simple,  so  just,  so  logical  as  that  of  unshackling 
the  present  Postal  Bank? 

Savings  banks  in  the  United  States  easily  earn  3,  3^, 
and  4  per  cent  for  depositors.  Their  loans  are  made  in 
accordance  with  laws  specifying  the  nature  of  the  secu- 
rity with  such  minuteness  that  the  duty  of  making  the 
loans  is  almost  a  purely  ministerial  one — simply  that  of 
tracking  the  law.  Shall  it  be  said  that  similar  laws  could 
not  be  enacted  for  the  United  States  Postal  Banks? 

Are  not  the  700,000  depositors  of  $140,000,000  in  the 
Postal  Savings  Bank  entitled  to  what  this  money  will 
earn  on  security  recognized  and  defined  by  law — security 
recognized  as  of  the  safest  sort — such  security  as  every 
savings  bank  gets  for  loans,  earning  an  interest  rate  twice 
as  high  and  more  than  that  now  paid  the  depositors  in 
the  Postal  Bank? 

At  this  point  let  us  summarize  what  has  gone  before: 

1.  The  response  to  the  call  for  the  recent  Liberty  Loan 
shows  the  readiness  with  which  the  people  will  deposit 
funds  with  the  United  States.     It  is  also  an  encourage- 
ment of  the  savings  habit  that  will  be  worth  as  much  to 
the  people  as  the  amount  of  the  loan. 

2.  Why  not  make  the  opportunity  of  depositing  with 


JUSTICE  AND  PRACTICAL  SENSE         57 

the  United  States  permanent  and  unlimited?  The  peo- 
ple would  then  have  a  depositary  which  could  never  fail, 
which  would  hold  their  absolute  and  lasting  confidence. 
A  perpetual  encouragement  of  thrift  and  saving  among 
the  people  would  then  be  offered — the  most  powerful  that 
could  be  imagined. 

3.  Existing  banks  have  gathered  for  use  in  the  de- 
velopment of   the  country  only  about  half   the  actual 
money  in  the  United  States.  Allow  deposits  to  any  amount 
in   the   United    States    Postal    Savings    Bank,   and   the 
remaining  billions  of  money  now  scattered  throughout 
the  land  in  private  and  secret  places  would  be  assembled 
and  would  form  the  basis  of  a  mightier  credit  structure 
than  has  yet  been  dreamed.     The  resulting  impetus  to 
business,  to  economic  advancement,  and  to  general  pros- 
perity could  not  be  estimated. 

4.  Let  the  deposits  thus  assembled  be  loaned  under 
laws  defining  the  security,  as  is  now  so  successfully  done 
in  the  mutual  savings  institutions  of  the  various  States. 
Let  the  interest  thus  earned  be  returned  to  depositors, 
less  expense  of  management,  which  expense  has  already 
been  shown  to  be  not  more  than  one-fourth  of  1  per  cent. 

5.  Money  at  3^,  4,  and  4j/2  per  cent  would  then  be 
comparatively  plentiful,  where  first-class  security  could 
be  furnished.     Interest  rates  throughout  the  country  on 
funds  for  necessary  and  legitimate  processes  of  produc- 
tion and  growth  would  fall.    Rural-credit  systems  would 
be  made  possible.     A  new  reservoir  of  mobilized  money 
would  be  added  to  that  already  established  by  existing 
banks,  and  the  financial  resources  of  the  country  would 
be  developed  to  the  highest  point.     Existing  banks  may 
utilize  this  reservoir  by  making  loans  of  a  portion  of  the 
funds  comprising  it,  which  loans  they  guarantee,  receiv- 
ing a  small  commission  on  the  interest,  and  by  acting  as 
agents  for  receipt  of  deposits. 

6.  The  nation  would  be  prepared  not  only  for  finan- 


58  PEACE  AND  PROSPERITY  VIA 

cing  the  war,  for  financing  the  people  on  the  lowest  pos- 
sible terms,  for  securing  to  them  an  adequate  and  safe 
return  on  their  savings,  but  for  the  problems  that  will 
follow  the  war,  for  the  shock  which  the  withdrawal  of 
immense  quantities  of  basic  money  will  produce. 

7.  Why  should  not  a  citizen  receive  for  his  savings  all 
that  such  savings  will  earn  when  loaned  on  the  best  se- 
curity? Why  should  not  a  citizen,  possessing  proper 
security,  have  ready  and  fair  access  to  the  assembled 
savings  of  the  people  for  the  essential  processes  of  home 
building  and  production  of  life's  necessities?  These  pro- 
cesses, properly  safeguarded,  afford  in  themselves  the 
best  security  known  to  men. 

With  these  preliminary  observations  I  now  direct  at- 
tention to  the  bill  I  have  introduced  for  the  unshackling 
of  the  Postal  Savings  Bank." 

Is  not  Senator  Sheppard's  argument,  above  presented, 
and  even  more  fully  in  the  notes  accompanying  the  bill, 
here  reprinted,  absolutely  convincing — unanswerable? 

No  attempt,  or  pretense,  has  ever  been  made  in  the 
Senate  or  elsewhere,  to  make  intelligent  answer  to  it.  The 
committee  to  which  the  bill  was  referred  has  never  given 
it  any  hearing  or  consideration — it  has  been  simply 
"buried"— "pigeonholed" ! 

"Silence"  seems  to  be  recognized  as  the  only  "safe" 
way  of  opposing  it.  Discussion  must  certainly  result  in 
victory  for  justice  to  industrial  wealth-creators :  the  "man 
with  the  hoe"  and  the  tractor,  the  plane,  the  hammer,  etc. 


JUSTICE  AND  PRACTICAL  SENSE         59 

A  BIG  NINETEEN  HUNDRED  AND  TWENTY 
ISSUE? 

"Hindsight,"   Foresight,  Shortsight 

How  near  will  be  the  "fit"  to  1920  election  will  be  the 
following,  most  of  which  appeared  in  a  national  paper 
just  after  the  election  of  1916? 


It  would  be  next  to  "silly"  to  point  to  a  fundamental 
error  of  both  parties  in  the  recent  election  campaign  were 
it  not  that  doing  so  points  to  the  wise  course  for  the 
future. 

Instead  of  keeping  the  country  on  the  ragged  edge  of 
uncertainty  for  several  days,  one  party  winning,  the 
other  losing  by  a  narrow  margin,  either  party,  had  it  been 
guided  by  the  courage  of  statesmanship  instead  of  largely 
by  the  cunning  of  partisanship — either  party  could  have 
won  victory  overwhelmingly  by  the  adopting  and  hon- 
estly, vigorously  exploiting  one  little  neglected  "plank" — 
the  shortest,  strongest  to  carry  voters  ever  forming  a 
part  of  a  political  platform:  "Unshackle  the  Postal  Sav- 
ings Bank" ! 

Not  one  voter  in  one  hundred  (perhaps  one  thousand 
could  be  safely  said)  knows  what  that  means,  but  nine 
voters  out  of  ten,  when  obvious  facts  are  pointed  out — 
justice,  the  square  deal  on  one  side,  wrong,  cunning, 
short-sighted  greed  on  the  other — nine  voters  out  of  ten, 
if  not  nearer  ninety-nine  out  of  one  hundred,  would 
stand  on,  stand  by  and  fight  for  that  "plank." 

Those  five  words  point  not  only  to  an  economic  issue 
of  prime  importance,  larger,  more  far-reaching,  infinitely 
more  beneficent  than  even  the  Federal  Reserve  Bank  bill 


60  PEACE  AND  PROSPERITY  VIA 

(not  antagonistic  to  that),  but  they  point  also  to  a  moral 
issue — one  of  plain  equity  for  benefit  of  millions — and 
"the  people"  are  always  unhesitatingly,  vigorously  right 
when  a  moral  issue  is  plainly  put  before  them. 

Here  is  an  issue  that  appeals  to  both  conscience  and 
pocket  of  every  man  whose  "profit"  is  not  in  "chaos" 
(there  are  some  such)  rather  than  in  general  prosperity. 

We  now  have  a  Postal  Savings  Bank — a  puny,  sickly, 
"ham-strung"  thing  which  some  would  like  to  see 
"killed,"  but  it  is  so  strongly  guarded  by  the  good  will 
of  the  people  that  no  "politician" — much  less  a  "states- 
man"— would  dare  propose  the  law's  repeal. 

The  heads  of  this  Postal  Bank  occasionally  issue  a 
"bragging"  bulletin  telling  of  the  great  "success"  of  the 
bank — nearly  600,00  depositors,  approaching  $100,000,000 
deposits — covering  the  entire  United  States,  this! 

Two,  single,  almost  "unknown"  savings  banks  of  New 
York  City  each  has  larger  deposits — over  $100,000,000 
— and  the  total  savings  deposits  of  that  one  city  are  about 
$2,000,000,000  (two  billion).  "Success!!" 

What  does  our  present  (our — you  and  I  voters — are 
"partners'  in  this  ignominious  "use"  made  of  "Uncle 
Sam!")  Postal  Bank  "do  to"  its  depositors? 

It  pays  them  two  per  cent  interest  (the  last  Congress 
ignobly  provided  that  no  interest  should  be  paid  on  some 
millions  of  deposits!).  And  it  cunningly,  plausibly 
"manipulates"  those  deposits  so  that  95  per  cent  of  them 
are  turned  over  to  bankers  only  for  two  and  one-quarter 
per  cent  interest — to  bankers  only,  who  loan  that  money, 
commonly  at  six  per  cent,  on  the  average  to  farmers  at 
over  eight  per  cent ! 

An  "unshackled"  Postal  Savings  Bank  would,  accord- 
ing to  precedent  of  one  such  state  bank  (in  Australia), 
have  about  45,000,000  depositors,  instead  of  a  petty  600,- 


JUSTICE  AND  PRACTICAL  SENSE         61 

000,  as  now,  and  instead  of  less  than  $100,000,000  depos- 
its now,  would  have  over  $40,000,000,000,  according  to 
actual  precedent  in  New  Ybrk  City  and  many  a  smaller 
city. 

Don't  imagine  that  an  "unshackled"  Postal  Savings 
Bank  is  "antagonistic"  to  bankers,  or  to  any  worthy  body 
— or  imagine  that  bankers  generally  are  charged  with  the 
"iniquity"  of  "manipulating"  the  present  "shackled"  Pos- 
tal Bank  law. 

Bankers  with  brains,  foresight,  conscience  and  patriot- 
ism (generous  supply  of  all  four  cordially  recognized) 
will,  it  is  believed,  see,  not  antagonism  but  co-operation 
and  help  in  the  unshackled  Postal  Bank.  Bank  prosper- 
ity goes  naturally  with  industrial  prosperity,  which  this 
will  enormously  stimulate.  "Patriotism" — this  will  pro- 
vide resources  of  probably  $5,000,000,000  to  $10,000,000,- 
000  for  the  United  States  Government  at  3  per  cent,  in 
case  of  need,  without  perceptibly  trenching  on  commer- 
cial funds.  "Conscience" — it  is  not  believable  that  honor- 
able bankers  approve  of  the  way  the  Government  is 
"used"  to  take  advantage  of  the  timidity  and  ignorance 
of  trusting  citizens  (present  or  prospective)  by  loaning 
their  petty  savings  at  two  and  one-quarter  per  cent  (as 
now  under  present  Postal  Bank  law)  when  thousands  of 
individual  bankers  would  be  glad  to  handle  the  whole  of 
them,  adequately  secured,  at  nearly  double  that  interest. 

For  those  who  have  assumed  the  recent  "Federal  Farm 
Loan  Act"  sufficient  financial  legislation  in  that  line,  these 
points  are  made: 

(a)  This  act  will  "mobilize  the  money"  necessary  for 
the  success  of  that  act. 

(b)  However  efficient  (many  doubt)  that  act  may  be, 
it  does  not  at  all  obviate  the  moral  necessity  of  wiping 
out  the  ignominy  and  shame  of  "manipulating"  the  petty 


62  PEACE  AND  PROSPERITY  VIA 

savings  of  about  600,000  present  depositors  in  the  Postal 
Bank,  so  that  they  receive  only  about  one-half  the  inter- 
est their  money  is  worth  in  the  open  market. 

(c)  Nor  does  it  right  the  wrong  and  injustice  to  prob- 
ably 80,000,000  would-be  depositors  in  or  borrowers  from 
the  Postal  Bank,  now  excluded  from  it  by  their  very  in- 
telligence— they  "know  too  much"  to  be  "fooled"  by  a 
contemptible  "two  per  cent." 

THE  NUTSHELL  OF  IT  ALL 

Make  every  post  office,  every  letter  carrier,  servants 
of  the  Postal  Savings  Bank,  as  they  now  serve  for  money 
orders,  registered  letters  and  parcel  post — equally  as  open 
to  all,  without  limit,  as  for  letters  and  parcels. 

Of  course  the  Postal  Savings  Bank  will  give  deposi- 
tors, not  the  ridiculous  two  per  cent  interest,  as  now, 
but  whatever  the  deposits  can  be  safely  made  to  earn,  as 
in  other  savings  banks — three  and  a  half  to  four  per  cent 
— or  possibly  nearer  to  seven  per  cent,  as  in  average 
building  and  loan  associations. 

Of  course  the  Postal  Bank  will  loan  its  deposits,  not  to 
bankers  only,  as  now,  at  the  wicked  two  and  one-quarter 
per  cent  interest,  but  to  whoever  (for  legitimate  use)  will 
give  adequate  security,  and  the  most  interest,  as  in  other 
banks. 


JUSTICE  AND  PRACTICAL  SENSE         63 


Sample  "$10  Bill"  of  proposed  Postal  Savings  Bank 
"Money,"  provided  for  in  Industrial  Savings  Act,  the 
words  "For  Uncle  Sam  and  World  Peace"  being  printed 
in  large  type,  over  the  face  of  the  bill — size  and  form  of 
ordinary  currency. 


(Face  of  Bill) 
Issued  1918  Jan.  Feb.  Mar.  April  May  June  July  Aug.  Sept.  Oct.  Nov.  Dec. 

THE  UNITED  STATES  POSTAL  SAVINGS  BANK 

HAS  RECEIVED  FROM 


(Here  the  depositor  will  write  his  signature,  or  not,  as  he  pleases,  this 
identifying  his  signature  on  the  back  when  he  indorses  and  passes  it.) 

TEN  DOLLARS 

(or  another  specified  sum) 

and  will  pay  the  same,  together  with  interest  earned 
(probably  4  per  cent,  per  annum  or  more),  the  interest 
compounded  semi-annually,  on  surrender  hereof  properly 
indorsed. 

If  no  signature  is  written  on  face,  indorsement  is  needless  and  pay- 
ment will  be  to  bearer.  Interest  shall  begin  from  the  first  day  of  the 
month  indicated  by  cancellation  in  margin  and  shall  terminate  the  last 
day  of  the  month  preceding  payment;  also  shall  terminate  five  years 
from  date  interest  begins,  before  which  time  this  may  be  exchanged  for 
a  new  issue  of  current  date.  For  other  details,  see  the  other  side. 

Issued  at  Washington,  D.  C.,  but  procurable  or  cashable  at  any  Post 
Office  or  authorized  Bank.  Signed  by  authorized  representative  of 

"TNCLH   SAM." 


64  PEACE  AND  PROSPERITY  VIA 

(Back  of  |10  Bill.  Poatal  Bank  "Monty") 

If  you   have  written  your  signature  on  face  hereof,  for  payment    or 
transfer,  indorse  it  here  as  you  do  a  back  check. 


You  may  get  certificates  like  this,  in  exchange  for  any 
bankable  funds,  wherever  you  can  get  postage  stamps ;  get 
any  denominations  wanted:  25  cents,  $1,  $5,  $10,  $50, 
$100,  $1,000  or  larger;  you  can  cash  them  at  any  post 
office  or  wherever  you  can  cash  bank  checks ;  but  you  do 
not  need  cash,  for  this  will  buy  anything  gold  will  buy, 
or  buy  gold  itself — is  better  than  gold  because  it  makes 
your  money,  in  pocket,  cash  drawer  or  safe,  draw  interest 
for  you  while  you  hold  it,  for  the  next  man  when  you 
pay  it  over. 

Money  deposited  in  Postal  Savings  Bank,  for  these  cer- 
tificates, will  be  loaned  : 

In  times  of  peace  not  to  exceed  25  per  cent  of  balance  of  depoait*,  to 
the  U.  S.,  if  wanted,  at  3  per  cent  per  annum. 

In  times  of  war  any  part,  or  all.  up  to  90  per  cent,  if  wanted,  to  the 
U.  S.,  at  4  per  cent  per  annum. 

Otherwise,  loaned  to  anybody  Riving  good  security,  satisfactory  to 
U.  8.  Treasurer,  always  to  the  highest  bidder,  preference  being  given 
to  the  smaller  borrowers,  $100  to  $10,000. 

Certificates  similar  hereto,  of  denominations  of  $5  and 
under,  but  drawing  no  interest,  will  be  issued,  and  re- 
issued, if  desired — though  they  earn  the  holder  no  inter- 
est, on  their  face,  they  do  earn  interest,  for  all  depositors 
holding  interest-bearing  Certificates,  because  the  money 
they  represent  is  loaned  for  interest. 

These  certificates  LEGITIMATELY  meet  the  popular  demand  for 
"guaranteed  bank  deposits,"  because  "Uncle  Sam"  is  custodian  of  the 
deposits,  as  he  is  for  money-order  funds,  and  thus 

This  Unshackled  Postal  Savings  Bank  will  have  over 
80  million  depositors — loyal  backers  of  "Uncle  Sam" ;  100 
billion  dollars  or  more,  for  war  or  peace — justice,  econ- 
omy, efficiency  far  beyond  Liberty  Bonds  (marketable 
only  at  a  discount! — no  discount  ever  on  these  Certifi- 
cates) or  W.  S.  S. 


JUSTICE  AND  PRACTICAL  SENSE         65 

LAND-RENT,  MONEY-RENT  AND  RURAL 
CREDITS 

Land-rent  is  the  annual  price  a  tenant  pays  for  the 
use  of  another  man's  farm  or  other  real  estate. 

Money-rent  is  the  annual  price  (interest)  a  man  pays 
for  the  use  of  another  man's  money. 

When  a  man  rents  a  farm  and  he  deals,  not  with  the 
owner,  but  with  an  agent  or  broker,  the  agent  gets  a  fee 
or  commission  of,  possibly,  5  per  cent  of  the  first  year's 
rent.  In  the  big  cities,  for  big  high-rent  buildings  the 
agent  gets,  commonly,  only  2  per  cent  of  the  rent — we 
have  heard  of  as  low  as  1  per  cent  instead  of  5  per  cent. 

The  Federal  Farm  Loan  Act  provides  for  twelve  banks 
to  act  as  "agents"  in  "renting  money"  for  farmers.  These 
banks  are  to  get  a  "commission"  for  their  services,  as  fol- 
lows, under  terms  of  the  law  as  originally  enacted : 

If  the  bank  gets  the  money  at  4  per  cent,  the  farmer  is 
to  pay  5  per  cent — that  is  1  per  cent  commission,  which 
is  25  per  cent  added  to  the  cost  of  the  "money-rent" ;  not 
of  the  first  year  only,  but  a  perpetual  annual  commission 
during  the  entire  life  of  the  loan,  whether  five  years  or 
thirty-five  years.  When  the  banks  get  money  at  3  per 
cent,  as  they  will  in  normal  times  (after  the  war),  the 
farmer  will  pay  a  perpetual  yearly  "fee"  of  one-third 
the  "money-rent"  during  the  entire  life  of  the  loan. 

In  the  "Robber  Lair"  of  Wall  Street,  on  the  Stock 
Exchange,  a  broker  will  get  for  you  $10,000  in  railroad 
bonds  for  a  commission  of  one-eighth  of  1  per  cent,  or 
$12.50 — not  annual  or  perpetual,  but  just  one  payment  of 
$1.25  per  $1,000. 

The  Federal  Farm  Loan  Act  (for  short  F.  F.  L.  A. 
herein)  is  here;  it  actually  improves  conditions  as  they 
were  and  it  is  wise  to  "make  the  best  of  it."  We  have 
heard  of  no  Congressman,  or  other  friend  of  the  act, 


66  PEACE  AND  PROSPERITY  VIA 

who  considers  it  as  "final"  or  "ideal,"  only  the  "best 
that  could  be  got  at  the  time."  This  paper  is  not  to  an- 
tagonize, but  to  suggest  improvement. 

The  Industrial  Savings  Act  proposes  to  give  the  bank 
acting  as  "agent"  in  "renting  money"  for  farmers,  not 
25  per  cent  or  33^  per  cent,  but  not  to  exceed  5  per  cent 
of  the  interest;  and  the  "Board"  which  is  to  administer 
the  act  may  reduce  that  but  may  not  increase  it.  The 
chief  reason  for  the  difference  in  "commissions"  to  banks 
under  the  two  acts  is  that  the  F.  F.  L.  A.  establishes 
special  banks  which  can  do  no  other  business,  whereas 
the  Industrial  Savings  Act  uses  the  facilities  of  all  exist- 
ing banks  in  good  standing  to  which  the  5  per  cent  com- 
mission becomes  mostly  that  much  extra  "income"  with 
almost  nominal  "outgo." 

In  "mobilizing"  money"  for  farmers,  the  Industrial  Sav- 
ings Act  uses  the  facilities  of  existing  banks  and  those 
of  the  entire  Post  Office  Department.  It  unshackles  the 
Postal  Savings  Bank  and  according  to  precedent  in  New 
York  City  and  many  another  smaller  city,  that  alone  would 
soon  mobilize  probably  over  $40,000,000,000— ample  to 
finance  farmers  and  oil  all  wheels  of  industry  and  com- 
merce. 

Study  the  Industrial  Savings  Act  and  see  the  many 
ways  in  which  it  improves  on — supplements — the  Federal 
Farm  Loan  Act,  which  it  does  not  antagonize,  but  will 
help  by  mobilizing  the  money  necessary  to  its  success. 

Another  point  of  very  great  importance  in  regard  to 
the  Industrial  Savings  Act  is  that  it  is  in  no  respect 
"class  legislation"  but  serves  equally  all  classes — workers 
of  every  kind,  merchants,  manufacturers — everybody. 


JUSTICE  AND  PRACTICAL  SENSE          67 


A  TREMENDOUS  MISTAKE! 

The  greatest  mistake,  probably,  made  by  the  majority 
of  the  worthy  host  of  those  who  seek  human  betterment, 
is  the  assumption  that  ''legislation  is  necessary." 

It  is  rarely  true! 

Without  one  new  law  to  be  passed  by  the  nation  or 
any  state,  honest  workers  have  it  now  in  their  power  to 
work  their  economic  will,  within  the  limits  of  what  is 
wise  and  right.  It  is  one  particular  object  of  this  book 
to  demonstrate  this. 

Just  ORGANIZE !  Standard  Oil  and  the  Steel  Trust 
exist  in  spite  of,  not  because  of,  legislation.  Organize  as 
they  do,  not  "for  talk,"  but  for  "business."  "Conven- 
tions" and  "Leagues,"  for  agitation  and  "hot  air,"  not 
their  method. 

Farmers  and  consumers,  when  they  will,  can  equitably, 
wisely,  legally  organize  strength  far  beyond  the  power 
of  those  giant  forces. 

"A  Square  Deal  in  Milk"  is  "a  practical  parable" 
showing  one  way  to  organize. 

Emphasizing  the  thought  "legislation  not  necessary," 
it  may  seem  out  of  keeping  to  put  in  the  very  front  the 
demand  for  honest  legislation  for  the  Postal  Savings 
Bank,  and  legislation  for  "Transportation :  National  Own- 
ership ;  Private  Operation." 

It  is  not  necessary  in  the  case  of  the  Postal  Bank,  for 
"A  Square  Deal  in  Milk"  shows  plainly  one  way  of  "mo- 
bilizing money"  and  utilizing  credit  possibly  fully  as 
effectual— it  is  "not  necessary"  but  it  is  RIGHT,  and 
the  people  are  entitled  to  have  it — and  it  is  in  their  power 
to  exact  it,  when  they  will  to  do  so  by  the  means  of  even 
"three  cents  worth  of  patriotism"  for  each.  Read  on, 
and  you  will  so  admit. 


68  PEACE  AND  PROSPERITY  VIA 

A  SQUARE  DEAL  IN  MILK 
Evolution  of  the  Industrial  Republic 

(Both  Producer  and  Consumer  of  all  products  of  in- 
dustry should  note  that  the  details  of  this  "milk  deal" 
illustrate  what  is  practical  in  other  lines  as  well.  Milk 
prices  quoted  were  prevailing  prices  at  the  time  paper 
was  written,  and  illustrate  principles  as  well  as  would 
current  quotations.) 

About  two  hundred  New  Jersey  farmers  center  about 
a  village  railroad  station  forty  miles  from  New  York 
City.  The  great  suburban  cities  of  Elizabeth,  Newark, 
Jersey  City,  and  others,  lie  nearer,  and  Philadelphia  is 
a  little  farther  away.  Their  milk  product  goes  to  all  of 
them,  selling  to  consumers  rarely  as  low  as  8  cents  a 
quart,  generally  for  9  cents,  or  even  more. 

In  the  month  of  June  the  farmers  are  receiving  only 
2l/2  cents  a  quart,  in  July  2^4  cents,  in  May  and  August 
3  cents.  The  cost  of  freight  is  under  l/^  cent  a  quart. 
To  these  farmers  the  extraordinary  difference  between 
the  price  to  the  producer  and  the  price  to  the  consumer 
seems  out  of  reason,  and  they  decide  to  make  an  effort 
to  reach  a  direct  SQUARE  DEAL  WITH  CONSUM- 
ERS in  manner  as  follows: 

A  "Producer  and  Consumer  Corporation"  is  organ- 
ized, which  we  call  "The  New  Jersey  Industrial  Repub- 
lic." The  farmers  subscribe  the  necessary  capital  stock 
to  start  the  business,  $10.00  up  to  $100.00  or  more  each; 
50%  of  the  capital  stock  is  set  aside  to  be  sold  to  con- 
sumers when  they  want  it,  the  ownership  of  stock  being 
strictly  a  "privilege"  and  not  a  "requirement''  from 
either  producer  or  consumer.  The  corporation  sells  to 
consumers  at  the  customary  retail  price,  8  or  9  cents, 
more  or  less.  Any  profits  are  divided  monthly  between 


JUSTICE  AND  PRACTICAL  SENSE          69 

producer  and  consumer  after  allowing  10%  per  annum 
dividend  on  capital  stock. 

To  illustrate:  A  farmer  producing  80  quarts  of  milk 
a  day,  or  2,400  a  month  of  thirty  days,  at  the  price  of 
3  cents  a  quart,  gets  $72.00  a  month.  Two  hundred  far- 
mers with  that  average  is  480,000  quarts,  and  $14,400 
monthly  for  the  farmers,  wholesale  price.  A  consumer 
using  2  quarts  a  day  at  9  cents  pays  $5.40  a  month,  and 
there  are  8,000  customers  of  that  average  to  use  the 
product,  paying  $43,200  monthly  retail  price.  Assuming 
the  average  price  to  be  3  cents  wholesale,  9  cents  retail, 
and  expense  of  delivery  3  cents  (it  is  believed  that 
the  cost  can  be  reduced  to  less  than  this),  leaves  3  cents 
a  quart  profit  to  be  divided,  or  $14,400  dividend,  monthly. 

Allowing  10%  per  annum  on  $20,000  capital  equals 
$166.67,  and  leaves  $14,233.33  monthly  to  be  divided 
between  producer  and  consumer,  which  is  a  little  under 
25%  on  the  gross  business  done,  or  $17.78  extra  a 
month,  $213.36  a  year,  for  the  80-quart  farmer;  $1.33  a 
month,  $16.00  a  year,  for  the  2-quart  consumer.  While 
the  increase  to  the  farmer  is  only  about  24  cent  a  quart, 
it  adds  probably  at  least  100%  to  his  profits — indeed  it 
is  unlikely  he  makes  1/4  cent  on  3-cent  milk.  The  con- 
sumer "rebate"  gives  him  a  price  of  about  6^4  cents  a 
quart  instead  of  9  cents.  If  cost  of  delivery  can  be 
reduced  to  2  cents  a  quart,  or  even  less,  as  thought  pos- 
sible, increase  of  profits,  or  savings,  is  substantially  more, 
for  both  producer  and  consumer. 

The  capital  stock  "privilege"  figures  out  in  a  similar 
way.  As  the  corporation  sells  strictly  for  cash,  $20,000, 
possibly  even  $10,000,  working  capital,  is  thought  ample 
for  the  business,  which,  to  begin  with,  the  farmers  have 
to  supply,  an  average  of  $100.00  each.  As  the  capital 
stock  is  to  have  a  dividend  of  10%  per  annum  before 
any  dividends  to  producers  or  consumers,  its  ownership 
(with  proportionate  voice  in  control,  of  course)  will  be 
a  "privilege"  all  right,  to  those  who  know  it,  and  that 


70  PEACE  AND  PROSPERITY  VIA 

privilege  will  be  in  proportion  to  the  business  each  does 
with  corporation;  a  40-quart-a-day  farmer  will  have 
a  right  to  own  one-fifth  as  much  stock  as  a  200-quart 
farmer.  A  consumer  who  pays  $5.40  a  month  for  miik 
will  have  a  "right"  to  own  stock  in  similar  proportion 
to  the  farmer  who  gets  $72.00  a  month  for  milk.  But 
the  small  consumer's  "right"  is  for  so  small  an  amount 
of  stock  that  few  of  them  are  likely  to  "claim"  it — more 
of  them  would  be  likely  to  invest  if  the  stock  could  be  had 
in  blocks  of  $100.00  or  multiples.  So  in  practice  the  capi- 
tal stock  is  likely  to  be  mostly  in  the  hands  of  the  farmers 
until  the  business  is  well  established. 

If  $20,000  working  capital  is  not  ample,  and  $40,000 
is  required,  please  note  from  the  foregoing  monthly 
"dividend"  illustration  that  only  about  $167.00  goes  to 
capital  compared  with  over  $14,200  to  producer  and  con- 
sumer. 

If  the  necessary  capital  is  not  taken  in  small  amounts, 
it  may  be  sold  in  larger  (10%  dividend-paying  stock  will 
not  go  begging) ,  but : 

It  is  an  essential  fundamental  principle,  guaranteed 
by  its  original  charter  and  printed  on  the  shares  of 
stock,  that  the  corporation  always  reserves  the  right 
to  buy  at  par  at  the  close  of  any  fiscal  year  from  the 
holder  any  portion  of  his  own  shares  in  excess  of  what 
he  has  a  "right"  to  own  by  reason  of  his  dealing  with 
the  corporation. 

Example:  If  total  capital  stock  is  $50,000,  and  the  total 
amount  paid  producers,  plus  the  total  amount  received 
from  consumers,  is  $500,000,  that  is  a  ratio  of  ten  to  one, 
and  a  producer  of  $800  worth  of  milk  would  be  entitled 
to  own,  by  purchase,  at  par,  $80.00  in  capital  stock ;  a  con- 
sumer of  $60.00  worth  of  milk  would  be  entitled  to  own 
$6.00  in  stock,  and  so  on.  Any  shares  in  "excess"  of  that 
ratio  the  corporation  has  a  right  to  buy,  at  the  close  of  any 


JUSTICE  AND  PRACTICAL  SENSE          71 

fiscal  year,  and  to  sell  at  par  to  those  who  own  less  shares 
than  they  are  entitled  to  purchase. 

This  provision  will  inevitably  keep  the  power  of  con- 
trol of  the  corporation  in  the  hands  of  producers  and 
consumers,  making  the  "cornering"  of  capital  stock 
and  control  and  manipulation  of  the  business  by  "capi- 
talists" impossible. 

Also,  the  large  10%  dividend  to  capital  guarantees  its 
ample  supply,  and  is  no  detriment  to  the  producer  or 
the  consumer  who  has  a  right  to  own  his  just  pro  rata 
of  stock;  he  simply  pays  from  his  one  pocket  into  his 
other  pocket  that  handsome  10  per  cent. 

Organization  being  completed  and  capital  paid  in  or 
subscribed  and  subject  to  call,  the  first  move  is  to  buy 
or  build  a  suitable  creamery,  and  thoroughly  modern  and 
scientific  equipment,  and  to  put  it  in  charge  of  a  compe- 
tent, experienced  manager.  Milk  will  be  "tested"  for 
solids,  cream  and  cleanliness,  and  must  reach  specified 
standards  to  be  accepted  at  all,  and  receive  the  lowest 
wholesale  price.  For  tests  showing  product  above  the 
necessary  standard,  graduated  premiums  will  be  paid, 
milk  above  a  specified  high  standard  to  be  kept  separate 
and  retailed  as  "certified"  (or  under  other  special  name) 
at  a  higher  price.  As  the  corporation  will  sell  only  for 
cash,  farmers  will  receive  their  pay  when  they  want  it, 
instead  of  the  middle  of  the  month,  for  the  previous 
month,  only,  as  is  customary  under  existing  conditions. 

As  the  "two  hundred  farmers"  are  the  only  patrons  of 
an  existing  creamery,  they  naturally  buy  it,  instead  of 
building  a  new  one,  probably  taking  over  the  present  em- 
ployees— possibly  also  making  an  equitable  and  mutually 
satisfactory  co-operative  capital-and-sales  arrangement 
with  the  present  creamery  owner. 

The  next  move  is  to  get  the  milk  to  the  consumer  at 
the  least  expense  possible  and  get  his  money  (of  course 


72  PEACE  AND  PROSPERITY  VIA 

it  already  has  a  market,  which  is  taken  over).  Let  us 
see  if  modern,  "scientific  management"  can  not  greatly 
improve  upon  existing  methods.  Now,  the  usual  way  is 
for  a  man  and  a  one  or  two  horse  wagon  to  spend  a  large 
part  of  a  day  in  distributing  possibly  80  quarts,  or  even 
200  quarts,  driving  "miles  and  miles,"  crossing  and  re- 
crossing  the  tracks  of  dozens  or  scores  of  other  milk 
men,  delivering  "on  credit"  in  most  cases,  collecting,  if 
he  can,  monthly,  or  when  he  can — and  paying  the  farm- 
ers (sometimes)  once  a  month. 

The  N.  J.  Industrial  Republic  Corporation,  though  it 
may  to  an  extent  temporarily  continue  antiquated  meth- 
ods, will  invest  soon  in  modern,  scientifically  equipped 
motor  milk  trucks.  A  milk  tank  is  built  on  the  principle 
of  a  gigantic  thermos  bottle  (in  different  shape),  except 
that  instead  of  the  vacuum  the  space  between  the  inner 
and  outer  walls  will  hold  ice  water.  The  tank  will  be 
divided  into  three  compartments,  one  large,  for  standard 
milk,  two  smaller  for  cream  and  certified  milk — its  total 
capacity  will  be  at  least  a  ton  of  milk,  probably  over  2,000 
quarts.  There  will  be  an  air  pump,  worked  by  the  motor, 
which  will  put  air  pressure  into  the  milk  tanks  (scientific 
equipment  will  wash  and  cool  the  air)  which  will  con- 
tinually aerate  the  milk,  forcing,  to  the  last  drop,  the  milk- 
through  accurate-measuring  meters  and  faucets.  The 
outside  air  and  dust  has  no  possible  access  to  the  milk. 
The  tanks  are  of  course  cleansed  with  scalding  steam, 
then  cooled  with  ample  running  water  whenever  the  milk 
supply  is  renewed.  On  top  of  the  tank  an  ice-chest  will 
serve  to  keep  cold  the  cold  water  with  which  the  between- 
walls  space  is  filled  when  the  milk  supply  is  taken  in — 
the  ice  water  entering  by  a  tube  at  the  bottom,  the  warm- 
er water  gradually  being  drawn  out  at  the  top. 

Two  men  and  a  boy  will  be  the  "team"  to  run  the 
equipment,  a  chauffeur,  a  man  to  draw  the  milk  and  take 
the  pay,  and  the  boy  to  expedite  service  of  customers. 
The  truck  will  be  almost  continually  on  the  move,  high 


JUSTICE  AND  PRACTICAL  SENSE          73 

gear  or  low  gear  as  need  to  be,  serving  every  house  it 
passes,  instead  of  one  house  in  ten  or  forty  as  do  the 
one-horse  wagons — from  early  morn  till  late  eve.  It 
will  have  a  regular  route,  and  time  so  accurate,  that  cus- 
tomers will  know  when  to  expect,  and  be  prepared  to 
be  promptly  served — 'they  will  know  it  is  to  be  prompt 
service  or  "get  left."  The  corporation  will  supply  metal 
or  printed  milk  checks,  $1.00  (  ?)  value  at  a  time,  giving 
with  each  $1.00  value  a  "dividend  check"  to  be  redeemed 
in  cash  or  in  milk  checks  once  a  month. 

Is  it  not  clear  that  the  corporation  can  by  such  equip- 
ment and  methods  supply  better  milk,  give  more  satis- 
factory service,  and  at  a  fraction  of  the  cost  of  delivery, 
than  is  possible  by  old  methods  ? 

How  and  where  to  find  "consumers"  to  serve  in  a 
"compact  body"  instead  of  by  present  "scattering"  and 
"guerilla"  methods,  is  the  next  question. 

It  would  seem  natural  to  begin  as  near  the  producer's 
home  ~s  possible,  with  the  county  town,  and  gradually 
move  toward  the  larger  cities  as  the  ground  is  thoroughly 
covered,  and  the  corporation  resources  grow. 

The  county  town  of  about  8,000  population — say  1,600 
families,  estimating  2  quarts  of  milk  a  day  to  the  family, 
requires  say  3,200  quarts  a  day.  They  are  now  served 
by  probably  thirty  or  forty  or  more  men,  most  of  them 
producing  their  own  milk,  the  marketing  of  the  milk 
rather  than  the  value  of  the  "milk  route"  being  the  prime 
consideration.  Two  or  three  of  the  corporation's  "milk 
trucks"  (instead  of  forty  wagons)  can  cover  the  ground 
and  do  it  better.  The  natural  and  expedient  thing  would 
seem  to  be  for  the  corporation  to  buy  out  those  forty 
"milk  routes,"  the  forty  owning  farmers  coming  into  the 
corporation  as  "partners"  with  the  original  two  hundred 
"charter  members."  The  forty  will  be  so  greatly  advan- 
taged by  the  improved  efficiencies  and  economies  of  the 
corporation,  that  small,  if  any,  "bonuses"  for  "good  will" 
will  be  necessary  to  buy  the  "milk  routes." 


74  PEACE  AND  PROSPERITY  VIA 

Evidently  the  "county  town  move"  by  the  program 
outlined  makes  small  market  for  the  product  of  the 
original  two  hundred  "charter  members" — it  is  simply 
necessary,  in  order  to  get  that  market,  to  "move  on"  to 
one  or  more  of  the  big  cities,  and  start  ten  or  fifteen  more 
milk  trucks  to  market  their  16,000  quarts  of  milk  a  day — 
developing  from  the  corporation's  existing  market.  In- 
deed, moving  to  the  county  town  not  only  takes  in  the 
forty  local  milk-dealer  farmers,  but  by  the  "efficient"  ex- 
ample incites  several  hundred  other  milk  producing  farm- 
ers centering  about  the  town  to  want  to  join  the  corpora- 
tion. And  there  is  no  reason  why  they  should  not  join, 
but  every  reason  why  they  should.  The  absolute  equity 
and  common-sense  of  the  plans  of  the  corporation  serv- 
ing mutually  all  parties  in  interest,  makes  it  natural  and 
reasonable  that  all  producers  and  consumers  within 
tributary  territory  centering  about  great  cities  should 
join  the  corporation.  One  great  corporation,  on  the  sim- 
ple, equitable  plans  indicated,  would  be  far  better  than 
scores  or  hundreds  of  smaller  corporations,  which  would 
almost  necessarily  to  some  extent  compete  with  each 
other,  and  overlap,  as  do  the  one-horse  milk  men  now. 

When  the  corporation  does  enter  the  big  cities,  it 
should  always  be  done  systematically,  completely  cover- 
ing such  territory  as  it  covers  at  all,  at  least  offering 
to  buy  out  on  fair  terms  any  "milk  routes"  in  the  terri- 
tory to  be  covered.  The  consumers'  right  of  "rebate" 
of  an  equitable  share  of  the  profits  on  the  milk  he  buys, 
and  10%  dividend  on  any  capital  stock  he  chooses  to 
own,  makes  every  customer  an  active  ally,  to  influence 
other  customers  to  come  in — and  obviously  an  approxi- 
mate "monopoly"  of  all  business  within  certain  territory 
is  essential  to  the  least  cost  of  delivering  the  milk — which 
is  now  a  larger  item  than  the  original  cost  of  the  milk 
itself. 

The  one,  practically  sole,  object  of  the  "two  hundred 
farmers"  was  to  market  their  milk  product  at  better  prices 


JUSTICE  AND  PRACTICAL  SENSE          75 

— possibly  a  few  of  them  might  have  "dreamed,"  with  a 
faint  warming  glow  in  the  region  of  the  heart,  of  altru- 
istic service  of  certain  city  consumers,  giving  them  better 
milk,  and  helping  them  to  "cut  the  cost  of  living." 

But  if  the  corporation  can  serve  them  so  well  in  the 
matter  of  milk,  why  stop  at  milk  ?  Why  not  buy  as  well 
as  sell?  Feed  (to  make  milk)  in  car-load  lots,  would  be 
the  first,  natural  step — then  fertilizers  the  same  way — 
then  farm  and  home  supplies  generally.  To  make  the 
largest  possible  purchases,  and  consequently  the  lowest 
possible  cost  for  each,  the  "milk  consumers"  will  natu- 
rally join  the  milk  producers,  in  buying  supplies,  which 
all  alike  use.  The  natural  consequence  is  that  the  cor- 
poration not  only  buys  and  runs  the  local  creamery,  but 
it  buys  the  leading  local  general  store,  probably  putting 
the  merchant  himself  in  charge,  gradually  buying  other 
stocks  of  the  other  local  stores,  cutting  out  wasteful  com- 
petition, vastly  reducing  by  "monopoly"  for  the  benefit  of 
all,  the  cost  of  all  farm  and  home  supplies. 

By  this  arrangement  (the  local  merchant  now  "har- 
ried" by  endless  competition  of  little  stores,  now  inter- 
ested, fairly  compelled  to  get  from  customers  the  highest 
possible  prices  for  all  they  buy) — the  corporation,  and 
every  member  and  patron  of  it,  makes  it  to  the  interest 
of  the  local  mercliant  to  secure  for  them  the  least  cost 
possible,  and  the  best  and  most  economical  service  pos- 
sible for  everything  they  buy.  The  merchant-manager's 
compensation, ,  and  that  of  every  assisting  employee, 
should  be,  in  part,  a  small  commission  on  the  total 
amount  of  business  done,  also  a  small  per  cent  on  any 
saving  in  expense  of  doing  the  business — thus  stimulat- 
ing all  to  do  the  largest  business  possible  at  the  least 
possible  expense. 

And  gradually  by  similar  co-operative  common-sense, 
"efficient"  methods,  the  farmers  will  market  all  their 
products  as  well  as  milk — and  serve  equally  well  the  city 
consumers  with  all  the  products  of  the  farm — and  both 


76  PEACE  AND  PROSPERITY  VIA 

producer  and  consumer  uniting  in  the  purchase  of  enor- 
mous quantities  of  the  products  of  the  factories  will  get 
them  as  well  as  milk  at  least  possible  cost. 

As  the  producers  have  for  their  convenience  and  econ- 
omy their  own  local  general  store  which  will  serve  sub- 
stantially all  their  local  wants  for  supplies  of  all  sorts, 
so  they  and  the  consumers  within  the  "compact"  terri- 
tory where  milk  is  supplied,  will  naturally  establish  their 
general  store,  in  this  the  local  consumers  probably  hav- 
ing dominating  control  of  details  as  the  farmers  prob- 
ably have  at  the  country  end.  Here  all  kinds  of  farm 
produce  will  be  supplied,  and  also  substantially  all  sorts 
of  other  supplies  for  home  consumption.  Of  course,  the 
"country  store'*  and  the  "city  store"  (the  scores  and 
hundreds  of  such  stores  which  will  naturally  in  time 
be  established)  will  buy  their  merchandise  together,  thus 
using  such  enormous  quantities  that  they  will  be  able  to 
get  lowest  possible  cost  prices — often  taking  the  entire 
product  of  factories.  The  milk  product  of  two  hundred 
farmers,  average  eighty  quarts  a  day ;  consumers  averag- 
ing two  quarts  of  milk,  8,000  families  are  served.  As- 
suming an  average  of  $400.00  a  year  to  a  family,  the 
8,200  families  require  $3,280,000  a  year  in  "home  sup- 
plies." Of  course  that  group  of  two  hundred  farmers 
soon  multiplies  to  two  thousand  or  twenty  thousand,  and 
the  consumers  grow  proportionately  to  eighty  thousand 
or  eight  hundred  thousand,  and  the  "supplies"  wanted  to 
$32,800,000  or  $328,000,000. 

Notice  that  the  distinguishing  characteristic  of  this 
proposed  Industrial  Republic  Corporation  is,  that  it  is 
not  organised  to  make  money  out  of  "outsiders"  but  to 
sen>e  "insiders"  and  save  waste  among  themselves. 

All  "outsiders"  have  opportunity,  and  urgent  induce- 
ment to  become  "insiders"  on  the  same  terms  as  the  origi- 
nal organizers — thus  doing  away  with  the  inevitable 


JUSTICE  AND  PRACTICAL  SENSE         77 

stimulus  to  "competing"  organizations,  which  prosperity 
always  incites,  under  existing  conditions. 

Thus  a  "Square  Deal  in  Milk"  and  a  combination  of 
business  common  sense,  equity,  and  "scientific  efficiency" 
will  naturally  lead  to  a  general  very  great  "cutting  of  the 
cost  of  living" — besides  many  other  incidental  benefits 
which  will  logically  follow — as  it  is  proposed  to  show  in 
other  pages. 

FINANCING  A  SQUARE  DEAL  IN  MILK 

We  have  all  heard  of  the  man  who  "lifted  himself  by 
his  boot  straps."  Never  mind  the  joke  on  "self  help"; 
if  there  is  to  be  an  "uplift"  of  the  producers  and  the 
consumers,  they  are  the  ones  to  do  the  lifting — and  they 
are  abundantly  able  to  do  it,  without  outside  help,  as 
we  shall  see  by  applying  a  little  common  sense  to  the 
matter  of  financing  this  milk  deal. 

It  always  requires  some  capital  to  conduct  any  busi- 
ness. It  is  estimated  that  $10,000  capital  will  be  ample 
to  launch  this  enterprise  successfully,  after  which  fur- 
ther capital  will  naturally  be  attracted  to  it  for  the 
growth  of  the  business  to  any  extent  desired. 

Take  note  of  the  leading  facts : 

The  two  hundred  farmers  produce  an  average  of  80 
quarts  of  milk  a  day  each,  which  equals  16,000  quarts  a 
day,  5,840,000  quarts  a  year  (cows  do  business  Sundays 
and  holidays)  which  at  3  cents  a  quart  to  the  farmers 
brings  them  $480  a  day,  $175,000  a  year. 

Consumers  averaging  2  quarts  a  day,  8,000  families 
use  the  product  which  at  9  cents  a  quart  taxes  them 
$1,440  a  day,  $525,000  a  year. 

This  business  is  now  actually  being  done,  but  through 
several  hundred  "middle-men"  in  several  different  cities, 
in  which  consumers  are  widely  scattered.  By  "bunching" 
the  consumers,  and  dealing  direct,  it  is  estimated  at  least 


78  PEACE  AND  PROSPERITY  VIA 

3  cents  a  quart  can  be  saved  in  expense  of  delivery,  which 
equals  $480  a  day,  $175,200  a  year. 

Instead  of  3  cents  saving,  estimate  even  2  cents  and 
there  is  $116,800,  over  ten  times  the  required  capital, 
saved  in  a  year,  the  $10,000  in  less  than  five  weeks. 

Another  present  fact:  when  farmers  sell,  as  they  do 
now,  to  dealers,  it  is  the  custom  for  them  to  get  their 
pay  (sometimes)  on  July  15th  for  the  month  of  June, 
only,  and  so  through  the  year  giving  dealers  45  days 
''credit,"  down  to  one  day,  an  average  of  22l/2  days.  Call 
it  20  days  only  at  $480  a  day,  which  equals  $9,600,  pretty 
close  to  $10,000  capital  the  farmers  now  actually  supply 
in  form  of  credit  to  dealers.  But  if  they  sell  direct  to 
consumers,  farmers  get  cash;  estimate  even  6  cents  a 
quart  (above  expense  of  delivery)  and  $19,200  is  accu- 
mulated (as  good  as  "capital")  even  in  20  days. 

It  is  evidently  a  very  simple  matter  to  raise  the  neces- 
sary capital !  This  is  on  the  basis  of  the  farmers  supply- 
ing all  the  capital,  which  they  would  have  to  do  till  con- 
sumers are  "shown"  (like  the  "man  from  Missouri") 
when  they  will  certainly  demand  their  "right  to  their 
share"  of  the  capital  stock — the  ownership  of  capital 
stock,  to  have  "10  per  cent  dividends"  being  a  "privi- 
lege" and  not  a  "requirement." 

The  natural  way  of  raising  the  $10,000  capital  would 
be  as  follows: 

The  milk  product  is  16,000  quarts  a  day ;  capital  want- 
ed $10,000.  That  is  in  the  ratio  of  16  quarts  of  milk  a 
day  to  $10  capital.  So  the  farmer  who  produces  80 
quarts  a  day  would  subscribe  for  $50  in  capital  stock, 
and  all  other  farmers  do  the  same  in  the  same  ratio  of 
milk  and  dollars.  Each  would  simply  deliver  milk  and 
let  the  corporation  collect  and  keep  the  money  until  the 
subscribed  capital  is  paid  for;  in  less  than  half  a  month, 
at  6  cents  a  quart,  the  capital  would  be  paid  in,  and  the 
farmers  from  that  time  on  would  get  their  money  as  often 


JUSTICE  AND  PRACTICAL  SENSE          79 

as  they  choose  to  collect,  instead  of  part  of  it  at  the  end 
of  forty-five  days. 

If  some  farmers  were  ''too  poor"  to  put  up  their  little 
proportion  of  capital,  their  "right  to  purchase"  capital 
shares  would  go  to  other  farmers  (or  to  outsiders)  who 
could  spare  the  money  and  would  be  glad  to  get  the  10 
per  cent  dividends. 

If  "10  per  cent"  dividends  is  thought  "paying  too 
high"  for  money,  it  may  be  answered  it  is  only  "from 
one  pocket  into  the  other,"  if  each  invests  his  share — 
as  he  has  a  right  to  do  whenever  he  is  ready  to  do  it. 
Further,  10  per  cent  on  $10,000  capital  is  only  $1,000  a 
year,  while  the  yearly  dividend  to  producers  and  con- 
sumers of  16,000  quarts  a  day  is  estimated  (3  cents  a 
quart)  at  $175,200— so  the  "10  per  cent"  dividend  "cuts 
a  very  small  figure!"  If  capital  is  to  be  $20,000,  or 
even  $50,000,  ratio  would  be  increased  accordingly. 

Let  us  look  at  some  other  facts  and  figures  of  interest 
to  producer  and  consumer. 

Each  of  these  two  hundred  farmers  buys  every  year, 
of  stock,  feed,  fertilizers,  farm  machinery,  etc. — make  a 
very  low  estimate  of  $300  a  year,  which  equals  a  total 
of  $60,000.  He  buys  also  of  home  supplies,  food,  cloth- 
ing, etc.,  say  $400  a  year,  which  equals  a  further  total 
of  $80,000  or  gross  $140,000. 

The  8,000  families  of  milk  consumers  buy  also,  of 
home  supplies,  say  $400  each,  or  a  total  of  $3,200,000  a 
year. 

As  in  previous  pages  noted,  it  is  most  natural  common 
sense  for  these  producers  and  consumers  who  find  co- 
operation in  milk  so  satisfactory,  that  they  co-operate 
also  in  regard  to  other  home  supplies. 

The  consequence  is,  that  the  farmers  establish  a  co- 
operative store  to  handle  that  $140,000  a  year  of  needed 
things  for  themselves  (and  possibly  two  or  three  times 
as  much  for  their  neighbor  farmers)  and  the  cor- 
poration also  establishes  for  the  8,000  consumers'  fam- 


80  PEACE  AND  PROSPERITY  VIA 

ilies  possibly  as  many  as  eight  stores,  one  for  each  1,000 
families,  convenient  of  access.  These  nine  stores,  serv- 
ing 8,200  families,  buying  a  total  of  $3,340,000  a  year, 
will  naturally  buy  together,  and  divide  purchases  among 
the  several  stores,  thus  getting  for  each  the  lowest  pos- 
sible cost.  (These  stores  could  deliver  a  large  portion 
r»f  the  milk  at  a  good  profit,  even  for  a  margin  of  one  cent 
a  qnart.) 

Of  course  these  nine  stores  each  requires  some  capital 
to  carry  stock  of  standard  goods  such  as  are  daily  want- 
ed, say  $2,000  each,  for  small  stock,  or  $5,000  if  capital 
is  plenty,  which  equals  $18,000  to  $45,000  for  store 
capital.  This  capital  may  be  raised  in  same  manner  as 
the  milk  money  capital,  each  producer  or  consumer  hav- 
ing the  "right  to  subscribe"  in  proportion  to  his  dealings 
with  the  corporation. 

But  let  us  look  ahead  a  little  bit : 

After  one,  or  two,  or  three  years  it  is  the  most  natural 
thing  in  the  world  that  the  200  farmers  and  8,000  con- 
sumers have  grown  by  gradual  accretion  from  one 
pleased  neighbor  to  another,  to  1,000  farmers  and  40,000 
consumers,  and  indefinite  expansion  may  be  anticipated. 

So  it  may  be  sensible  to  expand  the  capital  stock  of 
the  Producer  and  Consumer  Corporation  from  $10,000 
to  $100,000  or  even  more.  It  does  not  need  to  be  paid  in 
except  as  wanted,  or  is  expedient  to  use. 

But  the  prime  object  of  the  organization  is  not  to  earn 
big  dividends  on  big  capital,  but  to  save  producers 
and  consumers  in  the  cost  of  their  purchases — save  their 
legitimate  earnings  from  the  wasting  clutches  of  need- 
less "middle  men."  So  instead  of  trying  to  attract  capi- 
tal by  offering  big  "10  per  cent"  dividends,  let  us  see  if 
we  cannot  find  a  better  way,  and  get  capital  for  the  cor- 
poration as  cheaply  as  we  can. 

Start  in  the  natural  way  with  the  two  hundred  farmers 


JUSTICE  AND  PRACTICAL  SENSE         81 

whose  milk  the  corporation  buys,  and  who  have  not  been 
used  to  getting  their  pay  daily  but  used  to  getting  a 
part  of  their  due  at  the  end  of  forty-five  days — and 
even  of  that  money  most  of  them  have  saved  a  little 
and  it  is  lying  in  bank  unused,  and  drawing  no  interest 
— as  banks  usually  do  not  pay  interest  unless  money  is 
left  some  months,  and  each  farmer  knows  he  is  "liable 
to  want  to  use"  the  money,  and  so  deposits  subject  to 
call,  and  gets  no  interest.  It  is  a  low  estimate  that  these 
two  hundred  farmers  average  $200  each  of  "idle  money" 
in  banks  and  pockets,  which  equals  $40,000  "idle  money." 
And  the  8,000  milk  consumers  will  perhaps  average  as 
much  ($1 .500,000  more  idle  money) ,  though  more  of  them 
will  have  savings  banks  accounts,  where,  however,  only 
"undisturbed"  balances  draw  interest — and  they  get  less 
interest  than  this  corporation  can  earn  for  them. 

Let  the  corporation  instead  of  keeping  expensive  and 
laborious  "ledger  accounts"  with  each  farmer  who  de- 
livers milk,  pay  them  daily  in  Profit  Sharing  Certificates 
in  form  similar  to  following  (we  give  idea,  not  technical 
words)  : 

FRONT  OF  WORKING  CAPITAL  FUND  CERTIFICATE 

"There  is  due  of 

for  supplies,  cash,  or  other  value  received  by  the 
corporation  the  sum  of 

TWO  DOLLARS  (or  as  specified) 

with  annual  interest,  compounded  semi-annually,  as 
follows:  after  one  month  from  date,  3  per  cent; 
after  three  months,  4  per  cent;  after  six  months,  5 
per  cent;  payable  on  surrender  hereof  properly  in- 
dorsed, on  conditions  printed  on  the  back  hereof. 
Signed  by  president  and  treasurer  of  the  corporation 
and  countersigned  by  clerk  issuing  this  certificate." 


82  PEACE  AND  PROSPERITY  VIA 

BACK  OF  WORKING  CAPITAL  FUND  CERTIFICATE 

"The  other  side  is  on  following  conditions:  On 
presentation,  properly  indorsed,  it  is  payable  from 
the  assets  of  the  corporation  (only)  in  advance  of 
any  dividends  to  capital  stock,  or  of  any  profits  to 
producers  or  consumers;  certificates  payable  in  or- 
der of  presentation ;  the  corporation  has  the  right  to 
defer  payment  temporarily,  in  an  emergency." 

The  farmers  put  these  in  their  pockets  the  same  as 
money;  when  they  want  money  they  present  certificates, 
and  get  it;  or  they  pay  them,  instead  of  money,  for 
goods  at  the  corporation  store;  or  they  pay  to  any  one 
they  have  occasion  to  pay,  and  he  collects,  or  pays  out 
in  the  same  way.  Whoever  has  a  certificate  that  is  twenty 
days  old  is  likely  to  hold  it,  if  convenient,  ten  days  more 
and  get  the  3  per  cent  it  has  earned  (a  small  matter,  but 
that  much,  and  "many  littles  make  the  muckle,"  which 
gratifies  human  nature) ;  a  certificate  that  has  been  held 
two  months  is  likely  to  be  held  another  and  then  get  its 
4  per  cent;  and  so  on.  By  this  means  the  $40,000  or 
more  "idle  money"  of  the  farmers  will  gradually  accu- 
mulate in  these  Profit  Sharing  Certificates. 

To  the  extent  the  corporation  can  use  "capital"  to  ad- 
vantage, it  may  sell  these  certificates  to  any  of  its  pro- 
ducer-consumer members  who  have  "idle  money,"  little 
or  much,  in  sums  to  suit — $10,  $100,  or  $1,000;  if 
"takers"  choose  to  invest,  for  a  definite  time,  making 
them  payable  after  three  months,  or  after  one  year,  from 
date,  the  corporation  may  well  pay  */2  per  cent  more 
interest  on  them.  Thus  the  consumers'  $1,600,000  "idle 
money"  will  gradually  accrue  in  this  form. 

The  corporation's  many  thousand  little  sources  of  in- 
come aggregate  a  large  total,  and  while  the  big  city  banks 
will  not  pay  interest  on  the  petty  balances  of  individuals, 
the  corporation  on  its  large  aggregate  balance  can  read- 


JUSTICE  AND  PRACTICAL  SENSE         83 

ily  get  3  to  4  per  cent  from  some  of  the  big  solid  city 
trust  companies  on  its  daily  balances. 

But  it  can  do  better  than  that,  on  most  of  its  money, 
for  itself  and  for  its  producer-consumer  constituents. 
Instead  of  their  paying  (through  the  corporation)  "10 
per  cent"  dividends  for  the  use  of  capital,  they  will  pay 
an  average  of  probably  less  than  4  per  cent  to  their  pro- 
ducer-consumer patrons,  for  the  many  thousand  dollars 
the  corporation  invests  in  "store"  stocks  carried,  and 
selling  thousands  of  dollars  a  day,  in  its  several  producer- 
consumer  stores. 

To  the  extent  the  corporation  gets  "capital"  in  this 
way  beyond  its  need  to  use,  as  above,  it  may  invest  a 
part  of  it,  such  as  experience  shows  to  be  safe  from  be- 
ing "called  for,"  in  more  permanent  form,  where  it  will 
earn  6  per  cent  or  more — which  earnings  go,  of  course, 
to  increase  the  "monthly  dividends"  to  producer-con- 
sumer patrons. 

For  instance,  if  farmers  are  to  get  4^  cents  for  milk 
instead  of  3  cents,  as  now,  a  farmer  who  has  eight  cows 
(his  own,  paid  for)  is  very  likely  to  want  to  increase  his 
herd  to  twelve  or  fifteen  cows.  The  extra  cows  at  $75 
each  will  call  for  $300  or  $600.  A  "15  quart  cow"  is 
ready  sale,  any  day,  at  auction  for  about  $75 ;  a  20  quart 
or  a  30  quart  cow  commands  price  in  proportion.  He 
buys  his  eight  extra  cows,  then  sells  the  whole  herd  of 
sixteen  to  the  corporation  for  a  price  safely  below  real 
value  (to  make  the  corporation  absolutely  secure)  say 
for  $800,  with  the  right  to  keep  them,  to  feed  and  care 
for  them,  at  his  own  cost,  and  re-purchase  them,  paying, 
say  by  two  cents  a  quart  on  their  milk  product  which  he 
delivers  to  the  corporation,  the  re-purchase  price  netting 
the  corporation  its  investment  plus  6,  or  other,  per  cent 
per  annum,  which  the  "highest  bidder"  will  pay  for 
money  supplied  in  this  way. 

Not  one  farmer  in  ten  now  has  a  silo,  which  is  a  great 
promoter  of  milk  production,  and  a  great  source  of 


84  PEACE  AND  PROSPERITY  VIA 

economy  in  production,  so  that  every  farmer  wants  a 
silo,  and  could  well  afford  to  pay  even  10  per  cent  per 
annum  for  money  to  build  rather  than  do  without,  and 
the  majority  of  them  want  and  need  larger  and  better 
buildings  and  other  farm  improvements  that  would  earn 
them  big  interest  on  the  cost.  Probably  our  "two  hun- 
dred charter  member"  farmers  could  profitably  borrow, 
and  give  good  land  mortgage  or  other  security  for 
$100,000,  possibly  $200,000  or  more. 

And  without  doubt  many  of  our  "eight  thousand  char- 
ter member"  milk  consumers  are  situated  so  they  could 
use  an  aggregate  of  great  sums  of  money,  profitably,  for 
which  they  could  give  good  security. 

In  this  form  of  certificates  for  ''idle  money"  the  petty 
sums  of  thousands  of  individuals  are  made  always  ''avail- 
able" because  largely  invested  in  "liquid"  assets  and 
solid  securities,  or  are  in  bank  drawing  interest,  and  yet 
earn,  or  save,  producers  and  consumers  more  than  they 
get  now — better,  all  things  considered,  than  savings 
banks,  or  building  and  loan  associations  do  or  can  pay 
them. 

The  sum  of  it  all  is:  Producers  and  consumers  have 
their  own  "economic  fate"  in  their  own  hands,  whenever 
they  choose  to  exercise  the  little  common  sense  and  will-^ 
power  needed  to  "get  together."  No  need  whatever  to 
wait  for  "legislation" — which  often  only  muddles  and 
"mixes  things  up"  and  makes  them  worse — makes  sal- 
aries and  jobs  for  politicians  and  "favorites" — always 
distracts  from  efforts  at  "self  help,"  which  is  already 
simple  and  easy.  No  need  whatever  to  growl  and  whine 
about  the  "35  cent  dollar"  and  the  rapacious  "middle- 
man." Just  reach  out  and  take  the  100-cent  dollar,  pro- 
ducer and  consumer  "shaking  hands"  direct — and  "snak- 
ing" the  needless  "middleman"  so  far  as  we  do  not  em- 
ploy him  as  "chauffeur"  to  deliver  milk,  as  store-keeper, 
clerk,  etc.,  etc.  Don't  worry  about  what  the  "middle- 
man" will  do;  he  has  shown  his  ability  to  take  care  of 


JUSTICE  AND  PRACTICAL  SENSE         85 

himself — he  will  turn  producer,  and  "hustle  out"  some 
of  the  shiftless  farmers  and  mechanics  by  his  industry, 
vigilance,  skill  and  general  "get  there"  ability. 

OTHER  WAYS  AND  MEANS 

The  details  of  this  Square  Deal  in  Milk  are,  of  course, 
capable  of  almost  infinite  variation  and  possible  improve- 
ment. 

For  instance:  Instead  of  limiting  dividends  on  capital 
to  10  per  cent,  all  the  profits  might  equitably  be  distrib- 
uted in  that  manner,  in  which  case,  if  retail  prices  were 
maintained  as  now,  and  " working  capital  co-operative 
fund"  heavily  built  up  at  possibly  4  per  cent,  average, 
dividends  on  capital  might  mount  to  several  hundred  per 
cent.  As  each  patron  has  the  "right  to  own"  capital  stock 
in  proportion  to  his  patronage,  the  amount  of  capital 
stock  would  be  so  minutely  divided  there  would  be  only 
a  petty  amount  for  each,  and  each,  if  at  all  inclined  to 
"thrift,"  could  easily  own  his  share,  so  there  would  be 
no  injustice  to  anybody — only  dividends  from  one  pocket 
into  the  other  pocket. 

But  instead  of  maintaining  needlessly  high  retail  prices 
and  turning  consequent  profits  back  in  dividends,  retail 
prices  might,  in  preference,  be  lowered,  or  prices  to 
"producers"  might  be  correspondingly  increased. 

After  the  Industrial  Republic  Corporation  has  devel- 
oped to  so  large  a  growth  as  to  be  a  virtual  "monopoly" 
(for  the  benefit  of  all,  therefore  no  hurt  or  wrong  to 
anyone)  in  its  field,  instead  of  itself  being  regulated  by 
"supply  and  demand"  market  prices,  a  natural  way  to 
fix  prices  to  both  producers  and  consumers  would  be  as 
follows : 

A  producers'  committee  (say  of  three — "too  many 
cooks  spoil  the  broth")  could  be  elected  by  votes  of  all 
who  sell  to  the  corporation,  each  with  a  vote  having 


86  PEACE  AND  PROSPERITY  VIA 

weight  in  proportion  to  his  sales,  as  in  the  case  of  capi- 
tal stock  ownership. 

Also  a  consumers'  committee  could  be  similarly  chosen 
by  votes  of  all  who  purchase  from  the  corporation. 

These  two  committees  could  fix  prices  to  both  pro- 
ducer and  consumer  by  majority  vote,  or  in  a  case  of  ?.. 
"tie"  could  appoint  referees  in  the  usual  manner. 

LOCAL  TRANSPORTATION 

It  is  a  present  custom  of  our  two  hundred  milk-pro- 
ducing farmers,  that  once  a  day  each  hitches  up  a  one- 
or  two-horse  wagon  and  drives  to  the  station  with  his 
milk.  Sometimes  two  or  more  farmers  "club"  and  haul 
with  one  team.  But  it  is  a  general  rule  that  from  one  to 
two  or  three  hours  of  a  busy  day  is  "spoiled"  by  carting 
milk.  Two  hundred  farmers  X  ll/2  hours  =  300  hours  at 
25  cents  an  hour  =  $75  a  day,  counted  in  milk,  even  at 
3  cents  a  quart  =  2,500  quarts  of  milk  "spilled!" 

Instead  of  this  the  corporation  will  invest  in  the  neces- 
sary number  of  (2-ton?)  motor  milk  trucks,  built  for  the 
purpose,  which  will  be  run  all  day  (perhaps  double-shift, 
two  "teams"  of  men — the  truck  does  not  get  tired, — 
16  or  20  hours)  which  will  not  only  collect  the  milk 
which  is  shipped  to  the  city  twice  a  day,  at  least,  but  will 
carry  to  the  farmers  their  feed,  fertilizers,  store  supplies, 
meat  from  butcher,  etc.,  and  even  their  mail  from  the 
post  office,  two  or  three  times  a  day — the  vaunted  R.  F. 
D.  is  "child's  play,"  and  outrageously  expensive,  com- 
pared with  this  "self-service"  of  the  corporation!  (Some 
people  seem  to  think  that  somebody  else — "Uncle  Sam" 
— pays  for  the  expensive  R.  F.  D.  carrier.  Of  course 
it  comes  out  of  the  taxpayer,  especially  the  small  tax- 
payer.) 

Experience  would  soon  show  what  is  the  cost  of  run- 
ning the  motor  truck,  per  hour,  and  per  mile.  Each  pa- 
tron's distance  from  station  is  measured  and  known,  and 


JUSTICE  AND  PRACTICAL  SENSE         87 

a  tariff  of  rates  is  made  safely  profitable,  per  package, 
per  100  pounds,  extra  time  off  the  road,  or  for  needless 
waiting,  etc.,  so  that  each  patron  will  pay  his  just  share. 
And  as  the  corporation  does  this  "cartage,"  not  for 
"profit,"  but  for  "service,"  a  systematic  account  is  kept 
of  receipts  and  cost  of  running,  and  once  a  year  a  divi- 
dend of  such  profits  as  the  "Truck  Service"  shows  is 
divided  between  the  "chauffeurs"  (for  keeping  down  cost 
of  gasoline,  tires,  etc.)  and  the  patrons,  in  equitable  por- 
tions based  on  what  each  has  paid  or  done. 


88  PEACE  AND  PROSPERITY  VIA 

A  RIVER  OF  MILK 
The  Big-City  End  of  "A  Square  Deal  in  Milk" 

How  big  a  "river  of  milk"  would  three  million  quarts 
a  day  make,  flowing  at  two  miles  an  hour  (fair  speed 
for  a  river)  ?  Quite  a  stream !  New  York  City  ought 
to  have  for  its  health,  perhaps  would  have  if  cost,  de- 
livered, were  what  it  should  be,  nearer  twice  three  mil- 
lion quarts  a  day. 

Without  stopping  at  all  to  "bewail"  and  pity  the  milk- 
starved,  dying  babies,  or  to  criticize  the  semi-idiotic  (not 
to  say  cruel,  wicked)  business  methods  now  used  to 
serve  city  milk  consumers,  let  us  read  once  more  "A 
Square  Deal  in  Milk"  and  get  familiar  with  the  country 
end,  and  then  proceed  to  make  rational  plans  to  get : 

The  best  milk 

at  least  cost 

to  all  city  consumers. 

Start  with  the  fundamental  principles  and  plans  of 
"Uncle  Sam's  Automatic  Railroad  Regulator" ;  as  the 
nation  "finances"  the  railroads,  and  the  Men  Who  Pay 
the  Freight  "operate"  the  roads,  for  "utmost  efficiency 
and  least  cost,"  so  let  the  city  finance  a 

NEW  YORK  CITY  MILK  CONSUMERS  CORPORATION 

and  organize,  also  in  a  similar  way,  the  Milk  Consumers 
to  "operate"  the  business,  thus  putting  in  charge  the  ex- 
haustless,  resourceful  power  of  "self-interest"  to  "get 
results"  right  and  cheap. 

Start  with  one  million  dollars  capital,  all  to  be  held  by 
the  city,  the  members  of  the  "Board  of  Estimate"  acting 
c.v  officio  as  "Ownership  Board"  of  Directors,  similar  in 
plan  to  "Ownership  Board"  in  railroad  plans. 

Then  let  the  milk  consumers  of  the  city,  each  family 


JUSTICE  AND  PRACTICAL  SENSE         89 

having  one  vote,  and  an  additional  vote  for  each  addi- 
tional $100  a  year  paid  for  milk — let  these  meet  once  a 
year  in  each  election  district  and  each  vote  for  his  per- 
sonal choice  for  one  director  for  the  Milk  Corporation. 
The  best  business  men  of  the  city  would  be  candidates. 

Hotel  men,  restaurant  men,  using  thousands  of  dollars 
a  year  worth  of  milk,  would  naturally  be  specially  ac- 
tive to  see  good  men  elected.  The  result  would  be 
several  hundred,  possibly  several  thousand,  "directors" 
would  be  chosen.  Let  each  of  these  men  have  weight  of 
vote  in  proportion  to  the  number  of  votes  by  which  he 
is  elected,  and  let  these  men  meet  and  ballot  repeatedly 
among  themselves,  as  may  be  necessary,  until  the  num- 
ber of  directors  is  reduced  to  (say)  seven,  each  of  whom 
will  have  power  and  weight  of  vote  in  the  New  York 
City  Milk  Corporation  Board  of  Directors  according  to 
the  "cumulative"  number  of  votes  by  which  he  is  elected. 
This  would  put  in  absolute  charge  of  the  corporation 
business,  subject  to  the  "veto"  power  of  the  "Ownership 
Directors,"  the  ablest  business  men  of  the  city,  the  really 
dominating  minds,  as  estimated  by  the  milk  consumers, 
in  control,  "minority  representation"  being  also  present 
in  equitable  proportion. 

These  seven  Operating  Directors,  with  the  fullest  pow- 
ers of  any  business  board  of  directors,  subject  only  to 
the  "veto"  power  of  the  Ownership  Directors,  will  or- 
ganize and  "district"  the  city  and  employ  one  first  class 
business  manager,  with  ample  salary  to  warrant  "the 
best,"  and  such  assistant  managers  and  other  employees 
as  will  be  necessary  to  conduct  the  gigantic  business — 
3,000.000  quarts  a  day,  even  at  10  cents  a  quart,  would 
be  $300,000  a  day,  over  one  hundred  million  dollars  a 
year. 

Note  that  none  of  these  men  will  be  of  "political" 
standing.  They  will  be  put  there  by  the  "self-interest" 
of  milk  consumers,  to  secure  best  possible  milk  service 
at  least  possible  cost,  and  there  will  be  no  temptation  to 


90  PEACE  AND  PROSPERITY  VIA 

pay  extravagant  salaries  and  give  "sinecure"  positions  to 
"favorites." 

The  Milk  Corporation  will  have  a  right  to  the  absolute 
monopoly  of  milk  service  of  the  city,  but  may,  and  will, 
permit  such  other  service  as  will  not  conflict  with  the  best 
service  of  the  public  generally.  The  "going  milk  busi- 
ness" will  necessarily  be  taken  over  as  it  is,  and  "make 
the  best  of  the  situation." 

The  first,  temporary,  move  will  be  to  "district"  the  en- 
tire city  and  "license"  and  temporarily  contract  with,  the 
milk  men  now  serving  so  that  each  shall  serve  exclusively 
within  the  district  he  contracts  for,  supplying  milk  of 
specified  quality  at  specified  price,  amoly  and  promptly, 
to  all  wanting  service.  This  arrangement  should  at  once 
"cut  out"  probably  fully  one-half  the  present  labor  and 
expense  of  delivery  and  cut  the  cost  to  consumers  from 
two  cents  to  five  cents  a  quart.  "Licensed  stores,"  only, 
should  be  allowed  to  sell  milk  on  conditions  and  at  prices 
specified,  each  having  such  ample  territory  as  would  war- 
rant and  compensate  "best"  service. 

"Permanent  plans"  of  the  Milk  Corporation  should 
be  a  vast  improvement  on  this  temporary  arrangement, 
and  should  still  further  reduce  cost  and  improve  service. 

"Rome  was  not  built  in  a  day"  and  "scientific,  up-to- 
date  service,"  and  "scientific  management,"  could  pos- 
sibly come  about  only  gradually,  but  rapidly. 

The  present  big  sterilizing  plants  would  be  taken  over 
as  soon  a  possible,  altered,  improved,  enlarged  as  neces- 
sary for  most  perfect  service.  Present  owners  would,  of 
course,  be  justly  compensated.  The  present  vastly  ex- 
pensive and  clumsy  "bottling  methods"  (to  be  retained 
perhaps  in  a  limited  way)  would  mostly  be  replaced  by 
better  and  far  less  expensive  methods. 

Some  hundreds  (thousands  before  through  with)  of 
gigantic  "thermos-bottle"  automobile  milk  trucks,  2-ton 
to  5-ton  capacity  (2,000  to  5,000  quarts,  or  over)  would 
be  built — see  general  plans  under  "A  Square  Deal  in 


JUSTICE  AND  PRACTICAL  SENSE         91 

Milk"  (page  72).  These  purified  at  intervals  by  scald- 
ing steam  and  cooled  by  ample  water  and  ice,  would 
have  the  various  grades  of  milk  and  cream  "piped"  into 
them  at  the  sterilizing  plants.  The  big  trucks,  especially, 
would  serve  hotels,  restaurants  and  stores,  "piping,"  un- 
der washed  and  cooled  air  pressure,  required  supplies 
into  similar  "thermos-bottle  tanks,"  not  on  wheels,  at 
the  stores,  etc.  There,  each  local  plant,  being  equipped 
with  power  and  heat,  streams  of  water  and  ice,  would 
"faucet"  or  "pipe"  the  milk  to  patrons  in  suitable  recep- 
tacles of  glass,  aluminium  or  tin.  Cleanliness  and  sani- 
tation would  be  perfect,  cost  of  service  greatly  reduced. 
The  smaller  milk  trucks  would  serve  households  direct, 
taking  the  place  of  the  clumsy  and  ridiculously  expensive 
milk-wagon  service. 

Next,  to  get  the  milk  from  the  distant  farms,  of  best 
possible  quality  and  at  "just  price."  Necessarily  we  must 
start  with  things  as  they  are,  and  gradually  improve  upon 
them. 

Gradually  introduce  into  the  country  at  the  creameries 
the  "gigantic  thermos-bottle"  idea,  also  into  the  cars  for 
transportation,  instead  of  the  clumsy,  far  more  expensive 
"40-quart  milk  cans."  Thus  milk  could  always  be  piped, 
aerated,  cooled,  far  more  rapidly,  more  cleanly,  less  ex- 
pensively, reducing  cost  to  consumers,  while  improving 
service. 

"The  price  of  milk  at  the  farms/'  what  of  that?  A 
just,  even  liberal  price  must  be  paid,  or  adequate  supply 
cannot  possibly  be  maintained.  It  is  ridiculous  folly  on 
both  sides  to  have  "milk  strikes"  in  city  or  country. 

To  KNOW  what  "just  price"  is,  and  to  help  promote 
adequate,  quality,  economic,  milk  production,  the  Milk 
Corporation  should  directly  own  and  conduct  a  number 
of  "experimental  farms"  under  varying  conditions,  and 
should  "tempt"  individual  enterprising  farmers  to  "test" 
plans  and  "show  results"  by  "prize"  or  "premium"  offers. 
It  can  especially  "finance"  some  of  them,  helping  to  en- 


92  PEACE  AND  PROSPERITY  VIA 

large  or  improve  herds,  build  silos,  buy  land  for  pastures, 
drain,  develop,  improve,  in  any  direction  that  may  pos- 
sibly benefit  milk  supply. 

The  Milk  Corporation  starts  with  a  million  dollars 
capital  and  the  city  supplies  further  as  "need"  and  "re- 
sults" warrant.  Whatever  "per  cent"  that  capital  costs 
the  city  (certainly  less  than  half  the  average  cost  to  in- 
dividual enterprises)  the  Milk  Corporation  must  charge 
milk  consumers  such  price  as  will  pay  all  expense  of  ser- 
vice, up-keep  of  plant,  and  such  "dividend"  to  capital  as 
the  city  pays  in  interest.  No  "subsidy,"  no  "charity"  is 
desirable  in  connection  with  the  New  York  City  Milk 
Corporation  "River  of  Milk." 

Cost  of  milk  delivery  through  "licensed  stores"  should 
certainly  be  under  1  cent  a  quart,  and  delivery  by  2-ton 
milk  trucks  serving  every  house  and  apartment  they  pass 
should  be  under  2  cents  a  quart;  these  items  added  to 
wholesale  price  to  farmers  should  bring  highest  cost  to 
consumers,  even  under  present  "war  conditions,"  down 
to  12  cents  and  near  10  cents,  and  when  "normal  times" 
come  again,  prices  would  of  course  be  still  lower. 

"WHY  STOP  AT  MILK?" 

"One  thing  at  a  time  and  that  well  done  leads  to  ex- 
cellence" is  a  good,  wise  old  "copy-book"  motto! 

Make  a  "thorough  job"  of  the  milk  program  and  when 
that  is  done,  just  change  the  one  word  "milk"  in  the  title 
of  our  corporation  and  make  it  "New  York  City  Com- 
modities Corporation"  and  buy  and  supply  all  farm  pro- 
ducts in  the  same  way,  build  mammoth  "abattoirs"  and 
supply  the  city's  meat  and  "beat  the  meat  trust"  and  the 
foolishly  expensive  "private  meat  shop"  methods  (bad 
as  present  milk  methods),  and  so  on  with  all  "commodi- 
ties" in  universal  use. 

The  "economic  millenium"  is  not  yet  here,  and  will 
never  come  by  "just  talk,"  but  it  is  easily  within  the 
reach  of  ordinary  mortals  by  "practical  sense"  effort. 


JUSTICE  AND  PRACTICAL  SENSE         93 


SELF-HELP  THE  BEST  KIND  OF  HELP 

A  famous  poet  credits  an  ancestor  of  the  writer  with 
the  wise  saying  (not  original,  evidently,  as  he  quotes 
it): 

"If  you  would  be  well  served, 
Serve  yourself,  and  do  not  leave  it  to  others." 

Newspapers  of  all  classes — Republican,  Democratic, 
Progressive,  Religious,  Agricultural — are  "chock  full"  of 
complaining,  arguing,  prodding,  etc.,  because  of  economic 
and  other  conditions,  and  seemingly  nearly  everybody 
looking  to  Congress  and  legislatures  to  "set  right"  the 
"time  .  .  .  out  of  joint." 

But  is  there,  in  fact,  a  cloud  or  other  trouble  in  the 
economic  sky  which  it  is  not  now,  without  further  legis- 
lation, easily  within  the  power  of  those  who  are  inter- 
ested to  "get  together"  and  dispel,  or  overcome,  far  bet- 
ter than  there  is  hope  for  legislators  to  do  for  them  in 
the  next  hundred  years  ? 

As  an  example  take  the  greatest,  latest  "achievement," 
the  Parcel  Post,  against  which  nothing  need  be  said, 
except  to  point  out  the  easy  practicability  of  something 
else  infinitely  better. 

Here  are  the  facts: 

After  years  of  clamor  by  "the  people,"  Congress  has 
provided  that  we  may  ship  the  little  limit  of  20  pounds 
(the  original  law)  300  to  600  miles  for  the  sum  of  a  little 
over  4  cents  a  pound  =  $4.15  per  100  pounds. 

Before  us  lies  a  routine  freight  quotation,  100  pounds 
400  miles  for  28  cents  (instead  of  $4.15) — or  the  same 
in  "carload  lots"  for  13  cents  per  100  pounds,  and  there 
is  no  20-pound  "limit"  as  to  weight  of  package.  Here  is 
"bloated  monopoly"  railroad  service  at  about  one-thirty- 
second  the  cost  of  Government  service! 

The  only  advantage  the  Government  gives  is  "local 


94  PEACE  AND  PROSPERITY 

delivery."  It  would  be  a  "cinch"  to  contract  for  such 
local  delivery,  an  average  of  three  miles,  at  the  railroad's 
charge  for  400  miles,  and  thus  "deliver,"  including 
freight,  for  one-sixteenth  the  charge  made  by  beneficent 
"Uncle  Sam" !  "Uncle,"  it  is  expected,  will  do  the  job 
"at  a  loss" ! 

And  it  would  be  hard  to  name  an  article  in  general 
use  which  it  is  not  easily  practicable  to  have  brought  into 
any  community  within  400  miles  of  New  York  at  "car- 
load lot"  cost  of  freight — shipped  with  other  goods,  of 
course,  to  the  local  stores  of  the  "Industrial  Republic" — • 
coming,  now,  in  that  quantity  every  day  in  the  week,  to 
merchants.  Thus  with  the  "self-help"  of  co-operation 
Parcel  Post  becomes  almost  entirely  needless,  the  self- 
help  being  "on  the  spot"  and  far-away  the  cheaper. 

Are  we  a  lot  of  impotent  imbeciles  that  we  can  not 
get  together  and  serve  ourselves,  when  the  service  de- 
sired is  a  nearly  universal  want,  and  the  matter  is  so 
simple  as  handling  packages? 

Why  not  "stop  howling"  awhile  and  get  together  and 
serve  ourselves? 


PEACE  AND  PROSPERITY  VIA 


POST  SCRIPTUM 

"Profitable  Patriotism"?!  Words  of  reproach?  Op- 
probrious possibly,  sometimes.  It  depends  on  the  thing 
done. 

Again  such  patriotism  is  glorious — highest  honor. 
For,  not  only  is  "godliness  profitable"  in  the  religious 
sense,  but  also  in  the  economic  sense,  and  so  also  is  "pa- 
triotism profitable,"  to  the  nation,  the  state,  the  com- 
munity— to  the  patriot's  children,  though  he  may  have 
suffered  in  body  and  estate. 

This  book  can  hardly  be  "profitable"  to  the  writer,  in 
money — will  probably  take  dollars  where  it  brings  dimes 
— nor  is  it  desired  that  it  sould  "pay."  It  has  given  him 
"big"  pleasure  trying  to  be  of  service  to  other  "patriots," 
— the  mass  of  American  people. 

And  "there's  billions  in  it"  of  real  "dollar  profits" 
(laws  of  logic  and  immutable  mathematics  demonstrate 
it)  for  the  "Men  Who  Pay  the  Freight."  Scores  of  bil- 
lions of  dollars  for  honest,  thrifty  Savings  Bank  deposi- 
tors, when  they  force  "statesmen,"  by  public  opinion,  to 
give  depositors  justice,  to  "unshackle  the  Postal  Savings 
Bank,"  as  herein  proposed. 

We  have  yet  to  hear  from  an  editor,  economist,  legis- 
lator, or  common  "man  of  sense,"  in  disapproval  of  any 
essential  herein  proposed  (of  course,  details  may  be 
varied  and  improved — will  be),  with  "any  reason  why 
not  that  will  hold  water  better  than  a  sieve" ! 

But  you  "haven't  noticed"  newspaper  pages  "ablaze 
with  the  fire  of  agitation  for  a  good  cause" — for  right 
and  justice?  A  few  editors  have  spoken  out  in  hearty 
commendation — not  one  against. 

Most  editors  seem  "afraid,"  want  first  the  "consent  of 
the  governing"  financiers  and  politicians — want  to  see, 
first,  "which  way  the  cat  will  jump" ! 


JUSTICE  AND  PRACTICAL  SENSE 

Editors  widely  print  and  laud  the  bragging  bulletins  of 
our  present  shackled  Postal  Savings  Bank,  which  is  hard- 
ly short  of  a  "contemptibly  small  iniquity"  as  compared 
to  the  "real  thing"  an  unshackled  Postal  Savings  Bank 
would  be. 

"A  conspiracy  of  silence"  reigns  over  editors  and  legis- 
lators generally — perhaps  no  wonder,  since  "silence"  is 
the  only  safe  answer  to  our  argument. 

"W.  S.  S."  (War  Savings  Stamps)  are  "boomed" 
abundantly  (properly,  justly  so)  but  no  mention  is  made 
of  an  unshackled  Postal  Savings  Bank  (which  would  pro- 
duce $10  to  $50  where  W.  S.  S.  produce  $1)  to  which 
scores  of  millions  of  depositors  would  flock  like  hungry 
men  to  a  feast,  were  opportunity  given,  without  need  of 
being  "prodded"  to  patriotic  saving! 

Now  it  is  "up  to  you"  to  help  "wake  up"  editors  and 
Congressmen.  Write  and  ask  them  "why  not?"  Tell 
them: 

"I  vote  for  an  unshackled  Postal  Savings  Bank." 

"I  vote  for  Uncle  Sam's  Automatic  Railroad  Regula- 
tor." 

Get  others  to  do  the  same. 

The  "powers  that  be"  v/ill  "get  busy"  when  you  get 
busy ! 

J.  B.  A. 


If  you  want  this  book,  or  any  printed  matter  we  have, 
to  distribute,  you  can  have!  at  bare  cost  thereof. 


THIS  BOOK  IS  DUE  ON  THE  LAST  DATE 
STAMPED  BELOW 

AN     INITIAL     FINE     OF    25     CFISITQ 


/SJJ 


9Apr'59GM 


28Nov59RHt 
;  LD 


(,0V  17 1959 


i.n  II.  .v>, 


IB  '197/6 


